TDS mean if you are paying any amount to other party then first you have to deduct tax on that amount, only if the amount exceeds the threshold. There are many types of payment on which TDS are suppose to deduct but here we are going to talk about the TDS on fixed deposit, that how we can save tax on fixed deposit. So if you are going to fix your fund for the particular period than you should always choose the post office for FD instead of fixing the amount into the bank because the fixed deposit in the post office is fully tax free therefore at the time of maturity the receiver will be not applicable to pay TDS on the received Payment.
But if you have done your fixed deposit by bank than no need to worry about as you can claim the deducted TDS as refund if you file your annual income tax return only if your income are not taxable otherwise you have will be not Eligible to claim the refund. You can also claim the tax benefit till 1.5 lacs under section 80C of the income tax Act 1961
There are also few things except claiming the deduction under 80C in which you can save your tax on fixed deposit
Fixed deposit is subject to income tax as you get income as interest on you matured fixed deposit. That’s why you have to pay tax in the form of TDS.
But there is the threshold as well so that if you are getting interest less than that particular amount than there will be no need to pay TDS.
If you are earning more than 40,000 as the interest income from bank and the exemption applicable for the senior citizen till 50,000 then these followings cases will be applicable.
- The TDS on income of interest is not deductable if the annual income of the person is less than the slab rate which is defined
- If your annual income are not into the taxable slab rate than you can submit form15G and form 15H to you bank so that they not deduct TDS on the interest.
- Suppose if the income of interest exceeds the limit of 40,000 and you didn’t submitted the form 15G and 15H than your bank will deduct the TDS @ 10% on the income or if you didn’t deposited the PAN details than they will deduct TDS @ 20% on income.
- You can claim the deduction of fixed deposits under section 80C till the amount of 1.5lakh
What is Form 15G and 15H?
Form 15G and 15H is nothing but the declaration form which is use to submit by the individual to the bank for requesting for not to deduct TDS on their income because there annual income are not taxable , but for this having a permanent account number(PAN) is compulsory. The facility of submitting this form through online is also provided by some banks.
How to choose right form to submit
You have wondering that how to choose right form to submit and who can submit which form weather the form 15G or 15H.
Who can submit form 15G
- Any trust , HUF , resident individual , or other but except firm or company having age less than 60years
- Tax on your total income should be nil
Who can submit form 15H
- Any residential individual having age 60 or more than 60
- Tax on the annual income should be nil.
