Armed with bank deposit data after demonetisation, the income-tax department has increased scrutiny on depositors who don’t report their interest income when filing returns. While a few may deliberately hide such income, but most taxpayers fail to report such income as they are not aware of the regulations surrounding taxation of interest income.
“The biggest misconceptions are about clubbing of income. Most individuals don’t know when the interest income earned by wife or children needs to be clubbed with theirs,” says Naveen Wadhwa, general manager, Taxmann.com.
If there’s deposit in the name of children or wife, who is a home maker, the
