• Home
  • National News
  • How fixed deposits are taxed in India; Here’s all you need to know
How fixed deposits are taxed in India; Here’s all you need to know
National  
Financialexpress

FDs are considered as one of the safest and most common investment options. The interest income earned from FDs, however, has certain tax implications.

 

Fixed deposits (FDs) are uncomplicated risk-free interest-yielding term deposits offered by banks in India. They are considered as one of the safest and most common investment options. The interest income earned from FDs has certain tax implications which are being discussed here.
 
How is interest income on FD taxed?
 
Interest income from FDs is taxable as “Income from other sources” under the provisions of the Income-Tax Act, 1961 (the Act). Banks may deduct taxes at source at 10% on interest income if the amount of interest is likely to exceed Rs 10,000.
 
# However, if a declaration either in writing or in electronic mode in Form 15G (by a person other than Company or Firm) / 15H (by resident individuals above 60 years) is furnished to the bank affirming that tax on estimated total income during the financial year in which the interest income is to be included to tax would be nil, then no taxes would be deducted at source in such cases even if the income exceeds Rs 10,000.
 
# TDS at higher rates is deductible in case Permanent Account Number (PAN) is not furnished to the banks. In case of non-residents, TDS on interest income is deductible @ 30% plus additional surcharge and cess.
 
# If an individual has to pay higher rates of taxes based on his estimated income, then the remaining taxes on the interest income (after considering TDS by the bank) should be paid by means of advance tax / self-assessment tax.
 
# If an individual has not submitted Form 15G / 15H and as a consequence the bank has deducted TDS on interest income, the individual is eligible to claim refund of taxes so deducted by filing income tax return.
 

 

Tax deduction benefits on fixed deposits
 
An individual can avail tax deductions up to Rs 150,000 on the investments made in fixed deposits if the same is made in a scheduled bank for a period of not less than five years.
 
Further, senior citizens can avail tax deductions up to Rs 50,000 from the financial year 2018-19 with respect to interest income from fixed deposits under section 80TTB of the Act.

 
 


 
 


 
More in National
Ayushman Bharat Health Scheme: All You Need to Know

As Prime Minister Narendra Modi is all set to roll out the Centre's flagship Ayushman Bharat scheme, here's one-stop guide to all your queries regarding t...

Recently posted . 2 views

Delhi Metro Pink Line: Hazrat Nizamuddin stop to now connect crucial I...

The Hazrat Nizamuddin metro station, which is a part of the 9.7 km long Lajpat Nagar-Mayur Vihar section is likely to become operational soon. The metro station wil...

Recently posted . 11 views

Why India’s sanitation workers are nobody’s priority

One big obstacle before evolving policies for the welfare of sewage and septic tank workers is lack of data. There are no numbers available on those employed in s...

Recently posted . 6 views

IT Ministry mulls third notice to WhatsApp; may insist on message trac...

According to government sources, an internal discussion was held on the issue and a third letter could now be sent to WhatsApp in the next 7-10 days. ...

Recently posted . 6 views

You Can't Take Away My Achievement, Says Chetan Bhagat

Bhagat's upcoming book The Girl in Room 105 will be released in October and is currently available for pre-order.  

Recently posted . 4 views

Teachers Spend Only 19% of Their Time in Educating Students, Poll Duty...

The report stated that of the 220 days mandated by the Right to Education (RTE) Act, just 42 days were spent on teaching in 2015-16.

Recently posted . 4 views

 
 
 

Prashnavali

Thought of the day

हमें कभी हार नहीं माननी चाहिए और हमें समस्या को हमें पराजित करने की अनुमति नहीं देना चाहिए!!
Anonymous