Top 6 Rules for TDS on Fixed Deposit
1. Tax Deduction at Source(TDS)
If you have fixed deposit in the nationalized bank or corporate, then interest income from the deposit amount is taxable and 10% will be deducted at the source. This process is called as Tax Deduction at Source(TDS).
2. Deposit in different branches
Interest income is calculated based on the branch, if you have FD in the bank, up to Rs.10000 interest income in that branch is not taxable and Rs.5000 in case of corporate FD like Tata Motors or Mahindra Finance. So, financiers advise customers to split the amount deposit in the different branches to avoid TDS.
3. Form 15H
If you are senior citizen(above 65) and your income is below the taxable income, then you can submit Form 15H to the bank branches to fully exempt from the tax. Note that if you are not submitting the forms, the tax will be deducted and you have get it through filing the tax returns. That normally takes another one year to refund the amount you paid as the tax. A fresh Form 15H needs to be furnished for each deposit that is placed with the Bank
4. Form 15G
If you are age is below 65 and your income is below the taxable income, then you can submit Form 15G to the bank branches to fully exempt from the tax. Note that if you are not submitting the forms, the tax will be deducted and you have get it through filing the tax returns. That normally takes another one year to refund the amount you paid as the tax.
5. Interest Income for Minor
Deposits held by minors are also subject to TDS. The credit for the TDS can be claimed by the person in whose hands the minor’s income is included.
6. Joint account with Senior citizen
A non-senior citizen can open a joint account with senior citizen. In that case senior citizen must be the first account holer and they can get the prevail interest rates applicable to senior citizen.
