A taxpayer has raised concerns about the automatic calculation of interest income from RBI Floating Rate Savings Bonds (FRSB), 2020 (Taxable). According to the query, while filing Income Tax Return (ITR), the form automatically captured only 50% of the annual interest income for total income computation, despite no relaxation being available for these bonds. The taxpayer questions why only half of the expected income is being considered for tax purposes.
As reported by Moneycontrol, the interest on RBI Floating Rate Savings Bonds becomes due and is paid semi-annually on 1st January and 1st July every year. The bonds do not have any cumulative option, and interest is credited to bondholders every six months based on the due date. This payment structure explains why the ITR form may only capture partial interest income depending on the purchase date and timing of bond acquisition.
According to the expert analysis, there are two primary reasons for the discrepancy in interest income calculation. The first possibility is that the taxpayer purchased the bonds after the first due date of interest (1st July), resulting in RBI reporting only the interest due on 1st January 2026. The second reason may be that the Statement of Financial Transactions has not yet been uploaded by the relevant financial institution. The expert recommends verifying the Annual Information Statement after 15th June to determine the exact reason for the discrepancy.
As reported by Moneycontrol, taxpayers should verify their bank statements to confirm if interest for the full year has been credited into their account. If the complete interest amount has been credited, the taxpayer must offer the interest amount plus any tax deducted by RBI on the interest paid. The expert emphasizes ensuring that interest income is reported in the same year as the tax deduction to avoid inconsistencies in income and TDS credit claims.
