The Income Tax Department is planning to focus on those tax evaders who earn huge interests from fixed deposits and do not mention it while filing their income tax returns. Unlike interests earned on savings account, where an individual or HUF can claim an exemption from taxes on interests up to Rs 10,000 under section 80 TTD of the Income Tax Act, 1961, interests earned from fixed deposits is fully taxable. Banks deduct TDS on interests earned at a rate of 10% from depositors. Those accounts that are not linked with PAN attract TDS at a rate of 20%.
As per reports, the IT department is planning to focus on high interest income fixed deposits to mark tax evaders. Thus, the department is focusing on those depositors who earn Rs 5 lakhs or more from interests. This move is taken by tax authorities to meet their targets. Once these defaulters are brought to justice, authorities would come down on smaller tax defaulters.
Professionals like doctors, consultants, etc. do not disclose their actual income in income tax return forms. This is quite evident from the return they file with the IT department. The government has access to data from various organisations and tax authorities are planning to use analytics and technology to find tax evaders.