Friday 27 June 2014

DON'T FORGET TO CLAIM: interest on Bank Savings exempt upto Rs. 10K

Interest from bank savings account is taxable, even though there is no tax deduction at source (TDS). The good news is that since 2012-13 under Section 80TTA interest up to Rs10,000 in one financial year is exempt from tax. It means that if you have an average balance of Rs2.5 lakh in your savings account during a financial year (on which most banks give interest @4% pa), the interest would be tax free. This average would be lower, if you had savings account with banks offering higher interest rates. Yes Bank offers 6% for balances up to Rs1 lakh and 7% for balances above Rs1 lakh. You can avoid the minimum balance requirement of Rs10,000 for Yes Bank Savings Advantage account by opening an FD of Rs50,000.

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