Secret communication through lossless data hiding techniques is an active research field where payload management is a challenging task. The tradeoff between stego quality and payload capacity generally exists in such fields. To achieve higher payload, interpolation based data hiding techniques (IRDH) are opted in several areas including e-governance, military imagery, medical imaging systems etc. The purpose of interpolation in hiding systems is to provide better hiding capacity without altering the original pixels. Conventional interpolation-based hiding techniques lack in providing high embedding capacity due to some restrictions in embedding rules. Thus, this paper encompasses an effective embedding procedure for interpolation based reversible data hiding schemes to fulfill the capacity requirement. The objective of our proposed scheme is to increase the payload capacity by making use of all interpolated pixels in the cover image with good visual quality. Particularly, the proposed Threshold-based Bit Allocation (TBA) technique efficiently assigns the number of bits that can be embedded in an interpolated pixel. Experimental results show that the proposed interpolation based reversible data hiding technique performs better than many state-of-the-art methods in terms of hiding capacity as well as visual quality.