Clarification from CBDT regarding Interest received on Term Deposits

[Srivatsan Krishnamachari]

Dear Learned Friends, It is reported in News Papers yesterday that as per the clarification from CBDT, the Tax Payer should revise by March 31st their IT Returns for AY:2014-15 &2015-16 to reflect interest received on term deposits. What is the position if the Assessee's Taxable Income after the allowed deductions taken to account is less than the Taxable limit though such persons received interest on term deposits with banks wherein the Tax was deducted at source and duly remitted to the Department and how about the cases where the returns for AY:2014-15 & 15-16 have already been processed and refunds have already been received. The main point I request for clarification is the 'Income' whether total income or Income which is taxable arrived at after giving effect to all permissible deductions.

Thank You,

With Regards,

K.Srivatsan

[Ganeshan Kalyani]

Sir, I have not seen the newspaper. However I will try to answer the query. Disclosure of income is very much essential. Govt is been launching schemes in direct tax encouraging the assesses to disclose their income. Hence even if the income is exempt it has to be shown in computation of income and should be shown as exempt with reference to section of income tax act.

Further, the total income after deducting the allowable deduction, the remaining income is the taxable income on which income tax shall have to be calculated.

Further if the scheme provides for revising the returns of the assesse who has already filed the return and received refund, then it has to be complied. Thanks.

[Srivatsan Krishnamachari]

Dear Madam, Thanks

it was reported in the Hindu on Page number 15(Business) as a small piece of reporting by its special correspondent and the Issue dated 24/03/2016(Thursday). My personal view is and quite a few consultants' views are in the affirmative that an income from a source which is exempted from Tax then such income need not be shown in the return. It goes without saying if there is any enquiry from the Jurisdictional AO, then the burden of proof lies with the Assesee concerned.

With Regards,

K.Srivatsan

AI Summary

Disclosure of interest income: term-deposit interest must be reported in returns and revised where required. CBDT requires disclosure of interest on term deposits in tax returns and, if a revision scheme applies, taxpayers must revise earlier returns to record such interest. Interest should be shown in the computation and, if exempt, specifically classified as exempt; TDS already deducted and remitted must be reflected. Tax is computed on taxable income after deductions, but reporting obligations cover gross receipts; the taxpayer bears the burden of proof in any assessment inquiry.