Whoever said wishes don’t come true hasn’t explored our offers!
  • Tax Computation on Fixed Deposit

    The interest amount that you earn your Fixed Deposits is taxable. The tax computed on FD is levied according to the IT slabs of individual earning interest. The tax slabs vary for different individuals. Tax on FDs depend upon the income that is earned by a particular taxpayer in that year. The rates of the income tax slabs range between 0% and 30%.

    TDS associated with Fixed Deposits:

    TDS applicable on fixed deposit interest is deducted by the bank at the rate of 10% in case the amount to be paid or already paid is more than Rs.10,000. The limit stands at Rs.10,000 per branch of the bank, per individual.

    So, if an individual receives an interest amount exceeding Rs.10, 000 from various branches, but for each branch, he/she has received less than Rs.10,000, then TDS will not be deducted. A branch only deducts TDS if the amount paid from a single branch as interest is more than Rs.10,000.

    TDS on fixed deposit interest means when the interest payment time comes, TDS will be deducted at a rate of 10% by the bank. This particular amount will be deposited with the Government in your account. This amount will also be a part of the total tax that has been paid by you.

    In case, the TDS deducted is lesser than your tax liability, you must pay the amount that is left. Refund of TDS can be availed if the TDS deducted is more than your tax liability. According to Section 206AA, if the interest to be paid by the bank is greater than Rs.10,000 and the Permanent Account Number has not been submitted by the individual, TDS of 20% will be deducted. This step is taken so that all individuals are encouraged to submit their PAN details.

    No TDS deduction on FDs:

    In some cases, the total tax liability of an individual is zero, but TDS gets deducted by the bank. This happens as the interest payout exceeds an amount of Rs.10,000 from one branch. TDS refund must be filed by such people so that he/she gets back the money. The Government has introduced Form 15H and Form 15G so that taxpayers can easily file refund of TDS. These declaration forms are valid only for a period of 1 year. A new for must be filled and submitted every year for low or nil deduction of TDS on the fixed deposit interests.

    People also searched for

    reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.