Many of our site visitors has this query – What is the Tax treatment for Interest earned on Sweep in FD ?
When the Swep-in FD is matured or pre-matured at the time of withdrawal, the amount is credited to the Savings Account alongwith interest for that period.
Sweep-In FD is a time deposit like any other Fixed Deposit. The only difference is that it is created automatically & matured / prematured automatically.
The interest from such Sweepin FD will be treated the same way as interest from another regular FD.
The interest earned on fixed deposit (including Sweep in ) will be added to your income under the head ‘Income from other sources’ and taxed as per your slab rate.
As it is a term deposit, Section 80TTA is not applicable to Sweep-In FD.
Section 80TTA is applicable only to savings account where interest income upto Rs 10,000 earned during a financial year can be claimed as exemption.