Banks to inform tax department of taxpayers earning interest over Rs. 5,000 in any FY


In March, the tax department issued a circular directing a few entities, including banks, companies and brokers to report the interest, dividend and capital gains respectively earned by the investors to the tax department. Section 285BA of the Income Tax Act, 1961 and Rule 114E requires "specified reporting person" to furnish statement of financial transaction.


The tax department said in the notice that the move will enable them to provide pre-filled information in the tax forms to the taxpayers. Also, this will encourage taxpayers to report interest income in their income tax return (ITR), which they generally don’t report knowingly or unknowingly.


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