*Loan,banking and credit>>>income tax

Does income tax authority of india prosecute for evasion of small amount of income like interest on fdr?

Theoretically yes as the law does not distinguish small or big, concealed income or tax evasion. But practically no,as only a small percentage of returns are picked up for scrutiny and even here very few are served with notice for assessment proceedings. In these proceedings, the assessee or his authorised representative can provide clarifications on specific points. If further documents are demanded they are to be provided. If as a sequel to all this, some addition is to be made, the assessee can file a revised return also. If the tax due is paid, while doing so, as self-assessment tax, the matter ends. Even otherwise, upon conclusion of assessment proceedings and assessment order a notice of demand will be served. Then too, if tax demanded, is paid, the matter ends. Prosecution is very rare and limited to wilful and deliberate evasion of sizeable amounts.There is no prosecution for small evasions, however you may end up paying some interest and penalties for such evasions.

You can consult your CA for further details
In principle, tax evasion is a crime, irrespective of the amount that it involves. You can very well include in your next year's statement (if already filed for this year's) with a small penalty. Consult with a Chartered Accountant.