TDS on Fix deposit/RD

TDS on FDR/RD interest is applicable, but if interest of 1 financial year exceeds 10,000, bank will deduct interest at following rates.
i. 10% if PAN available in your account.

ii. 20% TDS on interest if PAN not available in account.

Remember that bank will deduct TDS @ 10% of the interest and submit or deposit to the Income tax department. This amount so deducted would form a part of the total tax that has been paid by you. You can check this amount in 26AS form also. If the total tax liability is less than the TDS that has been deducted, you can claim during ITR file return.

If interest on FDR/RD is less than 10,000 rupees, bank will not deduct TDS but will be shown in your 26AS form. This would be your income (other than salary).
For example: If you earned 9,000 rupees of interest, bank will not deduct your TDS but 9,000 will be added to your gross income. Suppose your salary income is 2,80,000 rupees, now it would be 2,89,000/- During ITR you need to pay interest.

But If your aggregate tax liability is 0 and bank has deducted your TDS then in that case you have to claim refund at the time of filing of income tax returns.

 

How can I avoid deduction of TDS by bank?
To avoid this deduction and refund process, the IT dept. has introduced form 15G/15H form. Under section 197A if a taxpayer submits these forms then on receipt of Form 15G and 15H, the bank will not deduct TDS. 15G and 15H forms are valid for 1 financial year only. Fresh forms need to be submitted for the next financial year i.e in April Month.

15G Form: If your age is less than 60 year
15H form: If your age is more than 60 years.

 

If my salary is taxable, can i submit 15G?
Never submit 15G/15H form, if your salary is taxable. Remember you can’t save TDS on FDR if your income is taxable. Interest will be shown in 26AS form and you will have to pay TDS during ITR. This is wrong as per Income tax rules also.

If my income is not taxable, forgotten to submit 15G/15H?
You can refund claim during ITR file. IT dept will refund your deducted TDS. We hope that you have got clear idea about TDS on FDR/RD. you can watch our video on digital banking india channel also about “15G 15H form kya hai, tds kya hai”. Share this information with your friends also regarding TDS on FDR/RD.

TDS on saving account interest

If your interest income in saving account is more than 10,000 rupees. TDS will be deducted. other rules are same as mentioned above.

What is Section 80TTA

You can refund claim amount deducted as interest income in saving account upto 10,000. For that you need to file ITR. During this you can mentioned amount deducted by your bank in saving account also.

How to save TDS?

You can be second holder in any account. In that case interest income will not be added in your income. if your spouse’s income is not taxable, you can add him/her as first holder in any account FD/RD/Saving. Interest income will be quoted on his/her PAN no.

 

Also read this post: TDS rate 2018-19 (TDS new update of 2018)

Read also: 15G 15H form new rule in 2019