Do mutual fund and fixed deposit investors need to file ITR if interest income is below Rs 2 lakh?
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Low interest income
Are you a homemaker investing in fixed deposits and mutual funds from your savings and want to know if you should file income tax if the interest income from FDs and recurring deposits is less than Rs 2 lakh? Here is some help for you, as reported by ETWealth.
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Based on basic exemption limit
Umesh Kumar Jethani, Founder, ApkiReturn said that as per the IT Act, filing an Income Tax Return (ITR) is mandatory only if an individual’s gross total income exceeds the basic exemption limit, which is currently Rs 3 lakh under the new tax regime ( Rs 2.5 lakh under the old).
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What is the interest income
The expert said that since the interest income is below Rs 2 lakh, and assuming no realised capital gains from mutual funds, you are not legally required to file an ITR. However, filing a voluntary “nil return” is highly advisable.
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Financial loan
The expert also mentioned that filing this ‘nil return’ helps to create a formal financial record, which can be useful for future loan, visa or financial documentation.
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TDS refunds
This also enables the investor to claim refunds for any TDS deducted by the bank on fixed deposits or savings interest, the expert said.
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A regular process
The expert also said that regular ITR filing improves financial traceability and can make future compliance or investment-related processes smoother.