Personal Finance

Your Taxes

Sudhakar Sethuraman | Updated on June 23, 2019 Published on June 23, 2019

I am a pensioner with taxable income. I hold a couple of NCDs (and no other bank FDs) for a value of ₹4 lakh, with monthly interest credited to my SB a/c, which comes to around ₹30,000 pa. If my understanding is correct, I have to include this sum under ‘Other Income’ and can also claim an exemption of up to ₹50,000 available for senior citizens. If my above presumption is correct, suppose I invest the same amount of ₹4 lakh with capital and interest cumulatively redeemable at the end of, say, five years to get a total of, say, ₹.6.5 lakh. In such a case, I have to pay tax at the slab rate for the interest component of ₹2.5 lakh. Thus, based on today’s tax rules, there is a clear advantage for opting annual or lower period interest credits than cumulative redemption for a senior citizen. Please tell me whether I am correct.

Chandran KM

Interest earned from non-convertible debenture (NCDs) is subject to tax under the Income Tax Act. As per Section 80TTB of the I-T Act, deduction of up to ₹50,000 is available to a resident senior citizen in respect of interest income from deposits held with a bank, a co-operative society engaged in the business of banking or a post office. Deduction is not available for interest received from NCDs.

I am a senior citizen 71 years of age. I filed my ITR-2 on June 5, 2018, without depositing a tax payable ₹28,790. When I learnt the mistake, I deposited the tax and filed the revised return on October 11, 2018. I received a notice u/sec 139(9) on February 16, 2019, pointing out that the health insurance premium claimed in the ITR was ₹40,804 instead of the 30,000 maximum permissible u/sec 80D. I disagreed and submitted that the health insurance premium claimed by me was ₹30,000 and not ₹40,804, to which they agreed and assessed the ITR. Now, I received an Assessment Order dated April 15, 2019, wherein a savings bank interest of ₹7,515 which was included in the Term Deposit Interest and shown under Income from Other Sources and deduction claimed u/sec 80TTA, has been disallowed, and a demand raised. I understand that the savings bank interest should have been shown under exempt income, but due to some misunderstanding at the time of filing the ITR, this mistake was unintentionally made. However, this is not going to affect the tax computation. Kindly guide me as to how I should approach the CPC to get the demand cancelled.

BK Gupta

We understand that for FY2017-18, your savings interest was inadvertently reported under term deposits, and as a result, no deduction was allotted under Section 80TTA of the I-T Act. Consequently, a tax demand was raised. There is no recourse to rectify the mistake by e-filing the response through the income tax portal wherein the rectification reduces your net taxable income. In the online portal, under ‘MY Actions’, you could disagree with the demand and provide the factual reasons. Based on the response from the central processing centre (CPC), you could approach the CPC and/or the assessing officer for an order without any tax demand.

The writer is Partner, Deloitte India. Send your queries to

Read further by subscribing to

The Hindu Businessline

What You'll Get

  • Web + Mobile

    Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device.

  • Exclusive portfolio stories and investment advice

    Gain exclusive market insights from the Hindu Businessline's research desk.

  • Ad free experience

    Experience cleaner site with zero ads and faster load times.

  • Personalised dashboard

    Customize your preference and get a personalized recommendation of stories based on your intrest.

This article is closed for comments.
Please Email the Editor