Under the income tax investigation bank FD, the report says. 5 rules to know

Jay Sairam

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Under the income tax investigation bank FD, the report says. 5 rules to know

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Interest earned by the bank fixed deposit (FD) is fully taxable. Banks deduct TDS over 10% on FD interest income of more than Rs. 10,000. Bank Fixed Deposit The most popular investment option

While referring to the income tax authorities, not paying tax returns or taxing income tax, the Times of India recently, in view of the income tax authorities, the fixed deposits (FD) of a bank, From the people who have earned high interest income, have paid taxes. The bank's fixed deposit is the most popular investment option for many people. What is the tax treatment of interest earned by the bank's fixed deposit? What are the provisions relating to TDS (tax on source)? It should be noted that the interest earned on the bank fixed deposit is fully taxable.

Five tax rules: A bank FD investor should know:

1) Interest earned by bank fixed deposits is fully taxable, unlike savings bank account, where income tax is exempted up to Rs 10,000 for one year. In the case of fixed deposit of the bank, the bank deducts tax on the source (TDS) at the rate of 10% if the interest income for the year is more than Rs. 10,000, check the combined interest income of all the branches of a particular bank, TDS calculation Is performed. Recurring deposits also fall within TDS. It should be noted that if the interest payable by the bank on fixed deposit is more than the taxable limit during the financial year, then the submission form 15G will be treated as invalid. Many banks allow for the submission of Form 15G or 15H Form online.

2) Depositors as determined by the bank are advised to present Form 15G / 15H to avoid TDS deducted by the bank. If someone fails to do so, then the person will have to claim the return by filing his income tax return (ITR). Interest received on fixed deposits has been combined with other income and you have to pay tax at interest rate on that income. These rates are shown under income from other sources

3) For those coming under the tax slab, here's a caution. Sandeep Sehgal, director of tax and regulatory in Ashok Maheshwari and Associates LLP, says, "Advance tax provisions should not be deducted by TDS due to other income, and that person has not provided adequate advance tax when it was due and taxes Interest will be paid with that. If some amount is already paid in the form of TDS, then that person can save the interest at least to that extent. "

4) Banks issue TDS credit certificate for tax deduction. Depositors can claim it as a deduction when filing their tax returns, if applicable.

5) Form 26 AS: This is an important document that the salaried person should use before tax filing returns. Tax is deducted from various sources such as salary and bank deposits, subject to the applicable exemption limit. Form 26AS is basically your tax credit statement which reflects all taxes received by the Income Tax Department. You can use Form 26 AS from the Income Tax Department's website. Taxpayers can also view Form 26AS through Net Banking. Select Bank offers this facility. "It is important to go through Form 26As to ensure that all proper credits have been taken appropriately for the deduction of TDS from any person's salary, FD interest etc.".