Of course, this is a really simple and straightforward question. However, in addition to wanting to know your exact title, the interviewee probably also wants to understand where you fit in the organizational hierarchy. Where you fit in may indicate to this person the degree of knowledge you have about the position being applied for as well as how important the position is to the company. For example, a member of the human resources department may not know as much about a technical position. A low level manager versus a vice president may indicate that the position is less important.
Points to Emphasize
While you will want to be honest about the exact title you hold, also indicating what that means in your particular organization is going to give the interviewee better information. For example, titles do not necessarily imply the same things at all companies.
Mistakes You Should Avoid
It is easy to feel put on the spot when asked this question as it can be a sensitive topic. In some companies, insufficient thought is put into the titles so that it may not accurately reflect your position or you may justifiably feel that you should have been promoted.
The main point here is to just answer this simple question with an honest and equally simple response. If you feel that it is relevant to give more information so that the interviewee better understands the position you hold within the company, do so without trying too hard to justify it:
My current title is Assistant Manager of Human Resources. Actually, I am currently filling the role of Human Resources Manager, which I have done for the last 6 months as my boss went on maternity leave.
Or, in another situation:
My title is Operations Manager, however, I am actually the head of the operations department, having worked my way up within the company over the last ten years.