Yes, you should include this income in your ITR.
The total interest received should be shown while calculating your total Income. Enter this amount on the heading "Income from other sources"
You should claim Rs. 7000 as a deduction under Section 80TTA. This deduction is for interest on savings bank accounts and is allowed up to a sum of Rs 10000, or the amount received, whichever is lower.
Make sure the TDS paid in respect of FD interest is shown under the head: Taxes Paid.
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