Missed Reporting FD Interest in Your ITR for FY 2024-25? File ITR-U Before March to Avoid Higher Penalties

Key Takeaways

1. Taxpayers who skipped FD interest income in their ITR for FY 2024-25 can still correct it by filing Form ITR-U. The window is open until March 31, 2030, under the Finance Act, 2025.
    
2. Banks send FD interest data to the Income Tax Department through the Annual Information Statement. A mismatch between this data and your filed ITR can trigger a scrutiny notice.

What Happens If You Don’t Report FD Interest Income in Your ITR for FY 2024-25?

FD interest is taxable in India under “Income from Other Sources.” You must declare it in your ITR every year, even if the bank already deducted TDS. Banks share FD interest figures with the Income Tax Department through the Annual Information Statement, or AIS. If your ITR for FY 2024-25 does not match what the AIS shows, a notice can follow.

There is a fix. Section 139(8A) of the Income Tax Act lets you file an Updated Return using Form ITR-U for FY 2024-25 until March 31, 2030. The Finance Act, 2025 stretched this window from 24 months to 48 months, with effect from April 1, 2025. 

One condition: ITR-U only moves in one direction. You cannot use it to claim a refund or bring your tax liability down. It is only for adding income you left out and paying what you owe on it.

The Longer You Wait, the More You Pay: How ITR-U Penalties Work

Chartered Accountant Tarun Kumar Madaan puts it plainly, “The Finance Act, 2025 has amended Section 139(8A) to extend the time limit for filing an updated return from 24 months to 48 months, effective from April 1, 2025.”

The extra tax you pay on top of your regular tax and interest under Sections 234A, 234B, and 234C goes up every 12 months.

For example, if your additional tax is ₹1,00,000, and interest charges under Sections 234A, 234B and 234C amounts to ₹30,000. You will pay an additional ₹32,500 filing the updated return before March 2027 while if you wait until 2029, the above amount increases to ₹78,000.

As per LoansJagat’s HDFC Bank FD guide, banks cut TDS at 10% on FD interest once it crosses ₹40,000 in a year, or ₹50,000 for senior citizens. But if your slab rate is 20% or 30%, the TDS only covers part of what you owe. Unreported FD income widens that gap further. 

What Should You Do Right Now If You Missed FD Interest in Your ITR?

Go to the Income Tax portal at incometax.gov.in and pull up your AIS for FY 2024-25. It will show exactly what FD interest figure the department holds against your PAN. If it does not match your ITR, file ITR-U now, before a notice arrives. Once the department sends a notice under Section 148, the ITR-U option closes and the penalty rules get much worse.

To file ITR-U, pay the extra tax first using Challan 140B under “Tax on Updated Return.” Keep the BSR code, serial number, and payment date ready, as the form will not go through without them. Senior citizens for whom the FD interest is now skipped, shall have a check as to Section 80TTB under the old tax regime which provides a deduction up to 50,000 from interest earned from the FD account as well as the Savings account, for the financial year 2024-25. 

Conclusion

ITR-U window for FY 2024-25 shall remain till March 31, 2030. In case, filed till March 31, 2027, your tax amount shall be 25% more. Filing in 2030 adds 70%. The Income Tax Department already has your FD interest figures from banks via AIS. A voluntary correction now costs far less than a notice later.

FAQs

I have forgotten to disclose interest from FD in FY 2024-25 IT return, can I revise it? 

Yes. You can submit an Updated Return(ITR-U) for the FY 2024-25 and the same will be permitted upto March 31,2030. The sooner you file Updated Return, lower would be additional tax. ITR-U can only be used to report missed income and pay the pending tax.

2. I received a Section 143(2) notice for my FY 2024-25 ITR after missing FD interest. Can I still file ITR-U?

No. Once you receive a scrutiny notice under Section 143(2), your case comes under assessment. You should respond to the notice and seek professional tax advice, as ITR-U may no longer be the appropriate option.