If you have made a fixed deposit (FD) in the bank, then the time has come to ensure that the bank does not deduct TDS (tax deduction at source) on the interest received on this investment. If you do not come under the purview of tax payment, the bank will not deduct TDS on FD, but if you receive more than 40 thousand interest on a bank’s FD in a financial year, then the bank will definitely deduct TDS. However, the bank will not deduct TDS if the income comes in the adopted slab. For senior citizens in a financial year. This limit is 50 thousand rupees. For this, Form 15G / Form 15H has to be submitted with the bank. Even if you have already submitted this form for fixed deposits in previous year, it will have to be submitted again.
Investors are required to pay tax only on the interest received on bank FDs and the bank imposes TDS on it which is adjusted during the filing of Income Tax Return (ITR).
TDS on Dividend Income: If you do not have taxable income, how will you get relief?
TDS of 20% on Pan FD interest without
TDS on interest income from bank FD is charged at the rate of 10 per cent, but if you have not given PAN, then TDS will be deducted at the rate of 20 per cent. In such a situation, if you fall in the highest tax bracket of 30 percent, then paying TDA at the rate of 10 percent will not be enough. Apart from this, those whose income is not above the adopted limit, they can inform the bank that TDS should not be deducted.
This type of information is usually submitted to the bank at the beginning of a financial year, Form 15G / Form 15H. Form 15H is for individuals whose income is more than 60 years and Form 15G is for all others whose total income does not exceed the maximum amount on which income tax is not to be paid.
These people can submit Form 15G / Form H
According to the Income Tax Act, only those people whose income is less than the exemption limit can submit these forms. Income up to Rs 2.5 lakh is expended for people below 60 years of age. Income above Rs 3 lakh is taxed for people over 60 years of age and below 80 years of age. There is no tax liability for people above the age of 80 years on income up to Rs 5 lakh. People with lower income than the exemption limit can submit Form 15G / Form 15H to the bank for not deducting TDS on the interest received on the bank FD.
(Article: Sunil Dhawan)