Missed FD Income in ITR? Pay 50% Extra Tax Now
If you forgot to declare your fixed deposit interest in last year's tax return, you can still fix it using ITR-U — an updated return. But the longer you wait, the higher the penalty tax you pay on top of normal tax.
That 'forgotten' ₹12,000 FD interest can cost you ₹6,000+ in penalties — more than 3 months of chai!
You pay 50% penalty tax on undeclared FD income if you file late
Key Takeaways
Check your Form 26AS and AIS on the income tax portal for any FD interest your bank reported — this is what the taxman already knows.
Calculate total FD interest earned across all banks for the missed year and compare it to what you declared in your original ITR.
File ITR-U on the income tax e-filing portal (incometax.gov.in) as soon as possible — every month you delay pushes you closer to the higher 50% penalty bracket.
If you forgot to declare your fixed deposit interest in last year's tax return, you can still fix it using ITR-U — an updated return. But the longer you wait, the higher the penalty tax you pay on top of normal tax.
Here's what happened: FD interest is fully taxable as 'income from other sources' — even if the bank already deducted TDS at 10%.. Taxpayers who missed declaring FD income can file a corrected return called ITR-U within 4 years of the relevant assessment year.. ITR-U comes with an extra tax burden: 25% additional tax if filed within 1 year, 50% if filed in years 2–4 — calculated on the tax due..
What you should do: Check your Form 26AS and AIS on the income tax portal for any FD interest your bank reported — this is what the taxman already knows.. Calculate total FD interest earned across all banks for the missed year and compare it to what you declared in your original ITR.. File ITR-U on the income tax e-filing portal (incometax.gov.in) as soon as possible — every month you delay pushes you closer to the higher 50% penalty bracket..
Even if your bank deducted 10% TDS on FD interest, you may still owe more tax if you're in the 20% or 30% bracket — TDS is not final tax settlement.
Explore TARA — Your Financial Co-Pilot
Retirement, tax, EMI, refinance and savings calculators — all free. Get a plan aligned to YOUR income, goals and CIBIL.
Try TARA — Free →References
- [1]“Missed declaring FD income last year? Here's how you can rectify it and what happens if you ignore it” mint - money · 28 Jun 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.