In India, saving is often prioritized over spending. Interest income is the money you earn from investments like fixed deposits, bonds, savings account, etc. It's a steady way to grow your wealth over time. This guide will help you understand and report this income when filing your taxes.
The different types of interest income are:
| Type of Interest | Interest earned on |
|---|---|
| Savings Account | Money in your savings account |
| Fixed Deposit | Fixed or recurring deposits in banks, post offices, or co-operative societies |
| Provident Fund | Balance in your Employees' Provident Fund or Recognized Provident Fund |
| IT Refund | Delayed income tax refund |
| Public Provident Fund | Balance in your Public Provident Fund |
| Any Other | Bonds, loans, or other investments |
Note: PPF interest is exempt from taxesSteps to add interest income
There are two ways to add your interest income
1. Autofill from Income Tax Department
- Navigate to File > Incomes > Other Incomes. Click Connect to import data from ITD
- Connect to ITD via Aadhaar OTP or credentials
Your interest income will be auto-filled. You can review it and proceed further.
2. Add Manually
- Navigate to File > Incomes > Other Incomes. Click on Interest Income
- Enter the interest earned during the year
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