Fixed Deposit(F.D)- Fixed Deposit are the fund on which the interest is paid for the fixed term & the funds can’t be withdrawn before maturity, & if the fund is withdrawn before maturity giving notice, there will be a huge loss of interest.
As all know, banks make fixed deposit to customer which have higher rate of interest compare to saving account. But sometimes we all see the bank deduct some amount of fixed deposit as TDS (Tax Deducted at Source). To get back the Tax from Income Tax Department is not easy and most of the people including me avoid doing so. There are some tips to save the interest on fixed deposit from TDS.
What is the procedure to deduct TDS on F.D?
1- The bank deducts TDS on fixed deposit only when the interest amount on fixed deposit exceeds Rs. 10000.
2- The TDS rate on the fixed deposit is 10%.
3- Bank will pay the remaining amount of interest like if you get 20000 Rs interest on your deposit Bank will pay 18000( 20000-10% of 20000).
4- For getting the refund of your Tax amount, one need to be files the income tax return
.How to Avoid TDS on Fixed Deposit
1- TDS is deducted at bank branch. So it is advisable to break up the deposit and make the F.D in some branch instead of making it in one branch with larger amount.
2- Make the F.D of small amount in different branches. It will save your interest as lesser interest less chances of deducting TDS.
3- You can submit Form 15H. You can submit form 15H if you haven’t any taxable income in previous year. This form is for below 65 years of age.
4- You can submit Form 15G. You can submit form 15G if you haven’t any taxable income in previous year. This form is for above 60 years of age.
5- All these forms should be submitted before 31st march of the year. If these forms are submitted on time, the bank will not deduct TDS.
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