TDS on Fixed Deposit: If you are getting 7 or 8 percent return on fixed or term deposits. So now after the new rule of TDS comes, your return will be reduced.
If you also earn from fixed deposits, then this news may shock you. Earnings from fixed deposits may reduce now. FD is generally seen as a safe investment. But do you know that this profit of yours can be reduced after tax deduction. If not, then let us tell you what is the rule for this…
Suppose you are getting 7 or 8 percent return on fixed or term deposits. So now after the new rule of TDS comes, your return will be reduced.
TDS rule for fixed deposit
According to Amit Gupta, MD, SAG Infotech, TDS i.e. Tax Deduction Service Charge of 10% will be levied on the income earned from Fixed Deposit i.e. your return. This tax deduction will be deducted according to the total income and tax slab of the person. On the other hand, those who are in the higher tax slab cannot claim this tax deduction during income tax filing.
Got this much post tax deduction return
According to Funds India’s May report, SBI, PNB, HDFC and ICICI banks are offering an average interest rate of 5% on deposits of 6 months. At the same time, after tax deduction, it is becoming 3.49%. Similarly, 6.75% interest was available on 5 years deposit. Which has now become 4.9% after tax deduction.
Why investing in FD is beneficial?
Investing in Fixed Deposit is always considered beneficial. Because there is no effect of sinking of bank or market on it. In this, your money remains safe for a limited time. At the same time, you can also withdraw this money if needed.
