To avoid TDS on fixed deposits, you should make a fixed deposit at the post office instead of going to the bank. Post office fixed deposits are TDS free. Depositors can avail tax benefits up to Rs 1.5 lakh under Section 80C of the Income Tax Act 1961 if deposited in 5-year term deposits.
The best way to get good returns on long-term investments Fixed deposits In recent times many enthusiasts have been investing heavily in these. The fixed interest rate on the investment route offered by the banks is applicable for a fixed period. Fixed deposits can receive higher interest rates than a savings account. At this point, however, they are fully taxable. In addition tax is payable on slab rates related to total income. Fixed deposits are tax deductible as embodied under Section 80C. However, it is only up to 1.5 lakh.
FD is subject to income tax. You have to pay tax on the slab rates related to your income. The bank will deduct this tax as interest income is credited to your account. Exempt TDS at the end of each year if you have a three-year FD. The Income Tax Department calculates TDS for your total tax.
Even if TDS is not discontinued, if you add interest income to your total income, you will be taxed on it. Your total interest income is taxable if you repay before the FD maturity. Also allows you to pay extra tax. It can learn about TDS from your earnings based on Form 26AS. If you have to pay any taxes, you have to submit it by the end of the financial year i.e. by March 31.
If the total interest income from all your FDs is less than Rs. 40,000 per annum, there will be no TDS. The exemption is applicable for senior citizens aged 60 or above up to Rs.50,000.
- If the income exceeds Rs 40,000, 10 per cent TDS is payable. If you do not submit your PAN to the bank, they will deduct 20% TDS from your deposit.
- TDS is not deductible when the total income is less than the taxable limit.
- The best alternative is to submit Form 15G and Form 15H to your respective bank to ensure that banks do not deduct TDS.
- Senior citizens with interest income on fixed deposits, savings accounts and other deposits can avail tax exemption up to a limit of Rs 50,000 per annum.
You can claim a tax deduction under Section 80C for tax savings. If a person chooses the old or current tax method, you can avail tax benefit up to Rs 1.5 lakh in a financial year by participating in tax-savings fixed deposits under Section 80C of the Income Tax Act.
Premature withdrawals are not allowed on these deposits with a lock-in period of 5 years.
This is the fastest and easiest way to get a short term loan. Depositors can apply for a loan immediately instead of withdrawing FD unnecessarily. In the case of a joint account, however, the tax benefit is available only to the first client.
How to file online?
This can be done if your bank allows you to file 15G / H online through Net Banking.
- Go to your bank net banking portal and login with your account details.
- Click on Form 15G / 15H at the Tax section.
- Then enter the appropriate details in the form and click on the submit button
- Download the Knowledge Slip and note down the Service Request Number.
