Interest earned from the savings bank account has to be declared while filing income tax return under the head Income From Other Sources (IFOS), taxable at a slab rate.
An individual/HUF can claim a deduction of up to ₹10,000 for interest earned on the savings account. If interest income from all the savings accounts is less than ₹10,000, the entire amount is deductible.
Interests eligible for this deduction:
- Co-operative banks
- Savings bank accounts
- Post office
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