We had closed one fixed deposit before maturity in April 2018 which was due to mature in November 2018. Since closure was about 7 months before maturity date, interest rate has come down from the date of placing the deposit i.e. 1st November 2015.
But tax was already deducted and paid based on higher interest rate for FY16, FY17 and FY18. How to claim refund of tax paid on interest portion lost in these years.
Please advise.
4 Answers
Hi,
In case the TDS relate for the same year, you can adjust the same against your tax liability.
I presume the interest has been deducted from already paid to you due to pre matured withdrawals. In such case you can offer the the net interest received for the year.
However in case these relate to different previous years, I believe there is no provision for deduction for penal interest against the interest already offered for tax in earlier years. (But the rules are not very clear on this matter!) Related articles : https://www.relakhs.com/recurring-deposit-taxes-bank-fd-rd-interest-itr/ https://www.relakhs.com/fy-2018-19-section-80ttb-senior-citizens/
I presume the interest has been deducted from already paid to you due to pre matured withdrawals. In such case you can offer the the net interest received for the year.
However in case these relate to different previous years, I believe there is no provision for deduction for penal interest against the interest already offered for tax in earlier years. (But the rules are not very clear on this matter!) Related articles : https://www.relakhs.com/recurring-deposit-taxes-bank-fd-rd-interest-itr/ https://www.relakhs.com/fy-2018-19-section-80ttb-senior-citizens/
Thanks. What would be the other source where we can get some guidance. Narasimhan
Hi..Probably, you may have to consult a CA. In case, you find a valid and right advise, kindly do share it here, can be useful to all of us, thank you!
I have consulted CA. As you said, for FY18 there is no problem. We could show net interest income while filing ITR. I believe CA can help us to include previous years also while filing current ITR . It is learnt that any tax paid on unrealised income is eligible for refund.
Thanks for your guidance.
Narasimhan
I have consulted CA. As you said, for FY18 there is no problem. We could show net interest income while filing ITR. I believe CA can help us to include previous years also while filing current ITR . It is learnt that any tax paid on unrealised income is eligible for refund.
Thanks for your guidance.
Narasimhan
Dear Narasimhan,
Thank you for sharing this info!
May I know if this is a cumulative FD or non-cumulative one?
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