When you open a fixed deposit account in the bank, the interest paid for the deposit will be taxable income and the banker will deduct the tax at source and pay you the remaining income to your account. This process is called as Tax Deduction at Source(TDS). If you are liable to pay the taxes, you can not evade the taxes . But, there is cases where the TDS is not applicable but still the banks may cut the income from the source. It can be avoided if you act wisely and submit the required forms. This article intend to explore that in detail. If you have any doubts please post it in the comments section. You can subscribe to our future articles here.
TDS on Fixed Deposit
The following are the some important points on TDS on fixed deposit:
- Interest on fixed deposit is taxable and will be deductible from the source.
- If the total interest amount of up to Rs.10000 is not taxable.
- If the total amount exceeds Rs.10000, 10% will be deducted as the tax. If you have not submitted the PAN number while opening the fixed deposit, 20% would be deducted as the TDS
- Tax liability for TDS purpose is determined at branch level. So, it is advisable to split the deposits into different branches and cut the tax rate. You can read top 5 fixed deposit rules.
Form 15H (download)
You can submit the form 15h, if the person is above 60 to avoid the TDS. You should know that only a person of 60 years or more is eligible to file Form 15 H.
Form 15G (download)
This form is for the age below 60. For example, Mrs. X earns Rs.25000 from the interest in a year. She doesn’t have any other income and housewife. She is eligible to file the form 15g and give it to the bank before March 31st. The tax will not be deducted from the source. There is no need to get the approval from income tax officers.
- One important point is that, these forms has to be submitted each financial year to avoid the tax deduction. It is advisable to submit in the beginning of the year.
- Where as for NRI’s who earn interest on their NRO’s account are subject to 30% TDS .
also read:
Summary
In this article I have written about the form 15h and form 15g to avoid the tax deduction at source. This might be useful for saving the tax by splitting you deposit money into other senior citizens in your family. This is time to think if you have plan to open a fixed deposit account. Thank you for reading the article!!! If you have any doubts please post it in the comments section.
You can subscribe to our future articles here.
October 30, 2010 at 1:59 pm
I would like to know if i have a FD of 20,00,000 and i want the interest to be paid to me every month cause i have saved this money so that i can get the interest every month and help my family. so how is the TDS going to ruin my peace of mind. Secondly i feel it wise to invest the money other then bank cause i feel that this TDS is like ripping people of their hard earned money and if the bank thinks that they have give us interest then they have not done any favour cause on our whole some money they have invested and earned much more then us.
November 13, 2010 at 2:38 am
sir,
i belong to Huf, i have my own personal fixed deposits in my name. But now the fd deposits have crossed the limit of Rs 10000 interest per financial year, can i apply for form 15 g to save tds. My age is 35 yrs.
November 23, 2010 at 10:45 pm
I would like to know about how can I save my FD from Income Tax or from deducting TDS. Now I had an amount of Rs.10,00,000/-. I had deposited the amount in a bank dividing the amount in to 3 and deposited in the name of me & my wife & my mother. So please explain me about what can i do?
December 29, 2010 at 8:00 am
Hello sir,
as you said that the total interest if exceeds Rs-10k is taxable under TDS,but that 10% deduction will be done on total interest amount or the amount exceeded the limit?
e.g-if total interest is 11k then deductions will be done on whole amount or the exceeded limit amount i.e 1000.(11000-10000=1000)?
means the tax would be 1100 or 100?
please let me know
thanks
January 7, 2011 at 1:12 am
SIR
MY FATHER IS RETIRED PERSON FROM GSL COMPANY GOA.AND HE IS HAVING A FIXED DEPOSIT IN SBI BANK FOR THE AMOUNT WHICH HE RECEIVED AS PF FROM THE COMPANY.
HIS TOTOAL FD IN BANK AMOUNTING TO 6 LAKH.
MY QUESTION IS . IS HIS AMOUNT IS UNDER TAX DEUCTION
OUR FAMILY CONDITION ARE
1. HE IS RETIRED PERSON
2 HIS AGE IS 61 YRS
HAVING 4 DAUGHTERS AND 1 SON ALL ARE STUDENT.
AND NO OTHER INCOME FROM ANY OTHER SOURCE.?
January 9, 2011 at 1:12 am
my husband who is retiring what to invest the retirement benefit ofrs 25lakhs in my name whether my interest amount will be added to the income of my husband since his income is full because of pension he draws .kindly enlighten me in the matter
January 17, 2011 at 11:57 pm
Dear Friends,
If my earning is taxable but because of investment (as HRA, PF, TA) till now haven’t pay a single penny as tax so in that case if I go for FD for five year of 200000 then my earning from interest will near about 17000 thousand annually so please clear me can I fill the form 15G to save my tax?
January 19, 2011 at 9:36 am
i am 40 years old. i have 25 lakhs. no other income. monthly i want 25 000/- income and also invest for future. give me good idea (apart from FD and Mutual Fund..what about gold investment)to invest.
January 21, 2011 at 4:59 am
Hi,
i want to invest 50,000 for 400 days in IndusInd Bank as they are offering 9.5% interest rates. will i be paying any TDS after 400 days. as per my calculation the interest will come at around 4500. should i go for IndusInd Bank? Is it reliable? please help.
January 23, 2011 at 3:33 am
Hi Krishnas,
My mother has taken VRS from government job last year, now she has received all her final settlement amount from the government. She is a housewife and has no other income rather than her pension. So I seek your advice how she will invest her money to avoid TDS deductions?
Thanks
Sachin
January 25, 2011 at 2:37 am
hello,
i am a housewife and my FD interest is exceeding 1,90000.
Should the bank tax the amount exceeding 1,90000 or the entire interest amount.
February 2, 2011 at 9:34 pm
Hi
If total interest amount obtained by FD is less than 10000, I should file form 15G?? Thanks in advance.
February 3, 2011 at 3:57 am
appriciated krishana for your knowldge on Income tax rules
I have question as you mention in ealy post to avoid tds we can splite deposite in different branch by openning new account offcourse
supporse I have fix deposite in three account 1 Lac of each interest@9 P.A. thus interest earned will be 9000*3=27000
since on each account account 9000 P A hence no tax will be deducted but I am a tax payer does I required to show this income while filling the IT returned if I do not show what will be the result.
I am working with MNC and we got form 16 directly from company
so it difficult to mention this income while filling IT Return
February 8, 2011 at 2:42 am
Hi,
I would like to create a FD for my minor daughter (she holds a minor’s account with the bank). If the interest amount is say 15,000 Rs then
1. What will be the TDS deducted by the bank? According to me it should be 10% of (15000 – 10000) 5000 which comes to 500 Rs. Is this correct?
2. Since the FD is in my daughter’s name and she does not have income then shouldn’t there be no tax? Please advice
February 9, 2011 at 8:24 pm
Best way to earn More interest and save TDS.
Off Late i see some banks are offering 10.5% returns for senior citizen.
My father is senior citizen. He gets pension and ends up paying little tax.
Mother earns little, she does file tax returns with zero tax.
If My father and Mother jointly deposit money, will they get 10.5 % returns as my Father is senior citizen and Bank does not deduct TDS as my mother’s income is less than the minimum Taxable limit?
Probably i am asking too much
February 19, 2011 at 11:41 pm
I really aprreciate you..you are really doing a wonderful jobs lots of people will get benifits of your idea.
I have a one question.I want to deposit 5 Lac in FD which got after property sel…is there something on property points of view where we can avoid TDS .
another thing is I want to open this on my mother name ..possible to avoid TDS considering this view.as this is the only source of income for her,,,,
February 24, 2011 at 5:17 am
Hi,
I want to understand how this TDS is calculated on my savings account.
I am a salaried employee. I do pay the tax on my income regularly. Now when i save some portion of amount from my salary and invest it in FD then also I should pay the tax on interest received by FD? If yes, then I am paying tax on same money twice I suppose.
For example If I invest around 1.5L for 1 year with Interest rate of 9%; at the end of year I will receive interest of Rs13500/-. So on this interest Bank will deduct TDS of Rs 1300/- ? i.e flat 10%?
Is this the rule?
But when I enquire in SBI long back in 2008 year, that time they said if the interest received in particular financial year is greater than 1L then only 10% TDS will be deducted on that Interest amount.
Also I want to understand when exactly this Form 15G to be submitted to Bank. Because till now I never came across such situaltion. But after reading above article I feel like I should understand how this TDS will affect my account.
My another query is. Let suppose I have one account in SBI and I want to make FD of amount for which I will be liable to TDS. To avoid TDS, you have suggested open FD accounts in different branches. So my question is what is the process of opening FD accounts in different branches? Am I suppose to open Savings accounts in that branch first and then I can open FD account? If this is the case then I guess SBI at least doesn’t allow to open more that one account in different branches. I am not much clear abt it.
Please confirm me on above queries.
Many Thanks,
Kishori
March 13, 2011 at 8:37 pm
Sir,
I m a salaried person my annual income 3.35lac, I have take inverstment in all tax saving instruments up1 lac & I have also got a interest income from FD which i had made in different banks, from one bank i got Rs.5400 & another banks 6000
please guide me is this amount to be add to my net salariy then cal ta or pay out TDS individualy for each fds
March 15, 2011 at 5:42 am
hi,i want to deposit 7lakh in bank as fixed deposit.my mothers total income is less than maximum tax limit and my sister is 18years old.i am 21years old(i am not working anywhere but as i am looking for a job so when i will get the job i will be tax payee) .so i want to know that on whose name should i open F.D so that no T.D.S will be deducted.
March 18, 2011 at 6:40 am
This is impressive source of information as well as equally good for responses. I have the following question:
1) If my FD is cumulative (means I dont get the matured amount until the maturity date), do I pay yearly tax on unearned interest ? I assume NO.
2) If the accumulated interest during maturity period is more than Rs 5,000 (but if broken down yearly, it is less than Rs 5,000) – How does TDS play its part ?
March 18, 2011 at 9:10 am
Hi,Sir
What is the tax liability of individuals in joint term deposit accounts.
(i)If one is tax payee and other is housewife.
(ii)If one is working but not comes under tax brackets and other is housewife.
One more question-how it is relevant with the first and second name holders.
Please suggest.
March 19, 2011 at 4:17 am
I would like to know about the tax liability of a retired person. My uncle is retired from Bank on last October. He got PF for Rs.12.5 lakhs, Gratuity for Rs.1.20 lakhs, Leave Surrender for Rs.3.45 lakhs. Please help me is he want to pay tax for above retirement benefits? or it is fully exempted? Expecting your reply.
Thankyou.
March 23, 2011 at 7:33 am
Sir,
Please let me know are FD Interest and NSC Interest both taxable.
Thanks
Kumar
March 31, 2011 at 10:58 pm
Sir,
Collection of our building maintenance was deposited in Bank as fixed deposit. We are getting only Rs. 80000/- yearly which is not taxable under law, even Bank deduct TDS. what to do to get exempt
from this. Kindly guide us in the matter.
April 3, 2011 at 9:48 pm
Dear Krishna,
If one submits form 15g at the start of F.Y does it mean TDS won’t be deducted even if interest on Fd exceeds 10000/- in later Fixed deposits done in that F.y.
Also will the TDS be deducted on the differential amt. i.e the interest amt exceeding Rs.10000/or on the whole interest.?
Hoping for another enlighting and prompt answer.
Regards
Jigme
April 4, 2011 at 6:43 pm
Dear Krishna,
My uncle in Chennai and I jointly own a property in Chennai. He is planning to pay me off for my share of the property. I plan to take this money and deposit into an NRO account I am going to open. I already know that taxes will be taken on the interest on a TDS basis. But I have two questions:
1. Will there be any tax implication on the principal amount that I will receive and deposit? Will it be subject to any income tax?
2. I am a resident in the U.S. holding OCI. Will I have to pay taxes on the interest earned in the U.S. also…meaning double taxation?
Thank you,
-venkatesh
April 8, 2011 at 8:45 pm
Dear Krishna,
Recently, I was told by a bank manager that they shall take into account all deposits across various branches of their bank(IBDI) for TDS.Is it true?
April 8, 2011 at 8:46 pm
Dear Krishna,
Recently, I was told by a bank manager that they shall take into account all FDs across various branches of their bank(IBDI) for TDS.Is it true?
May 3, 2011 at 4:42 am
i want to make fd in sbi of 100000 for 2 years how much i will get amount after meturaty and how much will be deduct tds
May 18, 2011 at 2:09 am
Hi ,
is it possible to avoid TDS in FD? if ,i take aloan against FD.
May 18, 2011 at 11:36 pm
Hello there,
I got a lot of valuable information on this website. But still I have a few questions. Kindly clarrify the following.
I have NRO deposits of Rs 1,300,000 with Citibank. Taxes deducted at source. Interest is ofcourse is more than Rs 10,000. I don’t have any other income in India.Does it mean if I file Tax Return, I will get my deducted money back? If answer is yes, can it be filed for the previous years? Thanks in advance.
Yash
May 31, 2011 at 2:49 am
I am a NRI residing in Gulf for last 15 years. I wants to place a NRO Fixed Deposit for Approx Rs. 60 Lacs. I understand that on NRO deposits, TDS applicable is 33.9%, whereas on domestic FD’s, it is only 10.9%. The question is, “Can I open a Domestic FD from the funds in NRE/NRO account”
I will appreciate your reply.
May 31, 2011 at 10:29 pm
I would like to ask u that if we have 4 FD’S of 50,000/- each in different SBI banks then tds will be deducted in each branch seprately or do they take into account only for particular branch.
Macklean
June 3, 2011 at 8:04 am
Dear sir,
I was a NRI and returned back to india in Nov2010.I have some fixed deposits in NRE account which are still running till the maturity date uptill another 1 year.Now i have taken up a job in india from Feb 2011 till date.I recently obtained a Pancard also and opened a saving account in India itself using this pan card no.My indian salary is now documented and liable for taxation as per the income tax slabs.Agreed.But What about the NRE deposits which continue to have the NRE status?Kindly advice what is to be done?
June 6, 2011 at 2:30 pm
Hi Krishna,
I am currently in USA along with my family and working for US based company, I have a resident savings account with ICICI bank in India, currently I am not eligible for any Income tax in India since I work in USA, now I would like open a FD for Rs.20 lakh with ICICI Bank. Since I don’t pay any tax in India, Am I eligible for avoiding TDS completely? In that case should I submit form 15G? If I should, can I fill it and post it from USA to the Bank in India?, I am going to open the FD online only since I am not physically present in India, Your help is really appreciated on this.
Thanks & Regards
Selva
June 8, 2011 at 1:34 am
my mother is 75 year old and my mother investment in sbi fdr Rs. 100000 and second investment in sbi bank fdr Rs 80,000. my mother is pension no pan card so please advice
June 18, 2011 at 12:06 am
My FRIENDS t.d.s is deducted on fixed deposit but i have no other source of income, i have not even submitted 15g form, now can i get back the T.D.S AMOUNT.
June 22, 2011 at 4:32 am
i have invest Rs.3 lacs in corporation bank last year and also submit form no. 15G and i have no other sources of income and after that tax will be deducted.shall i claim for the refund of such taxable amount??
please help.
June 28, 2011 at 8:16 am
Hello Krishna,
A related question. FD interest rates that are tax deductible, are reported by banks to the Income Tax Authorities. The tax deducted is also reported and this entire information is available now on Form 26AS.
The questions is this: Are banks required to report interest earned, which is not subject to TDS as per tax laws, to the Income Tax Authorities? Is information on these regulations in the public domain?
Thanks.
June 30, 2011 at 12:48 am
Hi Krishna,
I want to go for SBI-FD in my wife’s name since she is not in the Tax Bracket (House Wife). I understand if i declare form 15G, TDS Will not be detected from the interest. Could you please help me by answering the below questions
1) whatever the interest earned by her in this FD, will get accumulated in my earnings (i have recently read one article, they mentioned this investment is called Diversified Investment and so interest earning by a house wife will fall in husband’s bucket) Is it true……How to avoid the same
2) If the principal amount deposited by her exceeds the non-taxable slab, then she needs to pay tax for principal also
July 1, 2011 at 3:51 am
pleae tell me about interest earned on recurring deposite is taxable or not?
July 10, 2011 at 6:24 am
Dear Sir/Madam
My name is prakash
I have question regarding form 15G & 15H
I was in USA, UK, & CANADA before and I worked there for 7 year but now I return to India and I and my family have Indian nationality,
Now I have following 3 question that
1. I want to make FD of 20lakhs for my name(My age below 60) and FD of 20lakhns for my wife name (her age also below 60) so total 40lakhs FD but want to split in 20-20 laths because of below tax limit. I & My wife do not have any other income.
SO CAN I FILL FORM 15G FOR MYSELF AND FOR MY WIFE?
So there is no deduction of TDS and income tax.
2. Other question is that I want to make another 20-20 lakhs FD for my father and mother name, they are above 65.
SO CAN I FILL FORM 15H FOR MY PARENTS?
So there is no deduction of TDS and income tax.
3. So in total I want to make 80 lakhs FD on that I can get as per example 8% interest per year
So can I get 6, 40,000 interest per year without deduction of TDS and Income tax?
Can you please reply to my mail id prakashbabu1980@yahoo.com
Thanks
July 11, 2011 at 2:06 am
Sir
Bank deduct the TDS on FD of 2 lakhs in the nameof my wife. She is a housewife and no source of income. Now i want refund from IT dept. Which ITR form should i have to fill. and where in that form i show her income.
Can u give sample of such ITR form for such problem.
July 18, 2011 at 10:30 am
Hi ,
Its a great job you are doing.. i really appreciate your efforts of collecting the information for the clients..
I have a very small doubt..
As far as i know the TDS is customer ID specific, it is neither the branch specific nor the account number specific.. and no bank will give you two different customer id’s ..
It is a against RBI rule if a customer is having more than one customer ID in one bank…
I feel that an individual can invest with different banks but not in different branches in one bank, if the tds is customer id specific..
Please correct me if i am wrong.. this helps me a lot… and i would appreciate the early reply
thank you
July 25, 2011 at 2:04 am
hi krishnaji
I want to have 2 clarification. 1)I am a bank employee and is a tax payer .I have opened 3 to 4 fixed deposits in same bank.till date any TDS have been made .Will there b any difficulty for me in future.
2) One customer came to our bank and deposited 10 lakhs (500000/ each) in FD. He said though he has pan card he is not tax payer, he is 83 year old.Is he eligible for exemption? The money he deposited was from sale of a property.
Today only I saw your site and thank u very much sir, for rendering such a use full service to the needed public
regards
jaya
July 27, 2011 at 12:34 am
Hi,
Please let me know if an individual dont have taxable income,what is the maximum amount can be fixed in fixed deposit scheme?
for example : No Tax limit for men is 1.8Lac/PA and for women 1.9L/PA.
Is it possible to deposit till the interest earned from FD will be 1.8Lac/PA and claim the TDS exemption by filling the for 15G
Thanks
Raj
July 30, 2011 at 10:14 pm
Dear Krishna,
As par your advice to split your FD in different branches to avoid TDS, i consulted my CA , but he told me that while filling the returns ,you must mention the interests earned from all the different branches and that will sum up and then if its more then 10000 then you will be taxed for that acc. to 10%,if its more then 10000. is it true? then whats the benefit of splitting the FD in different branches if in the end its going to sum up the interest earned from all the different branches? please guide me.
Thanks,
Hiral.
August 6, 2011 at 12:20 am
Hi Krishna
I happen to see your site on ways to keep tax at minimum.My wife’s salary is going to be 6.5 lakhs per annnum from this year.Last year she was able to do an investement of 1 lakh only.Please let me know about any article where we can get more tax excemption.
Regards
Jose
August 18, 2011 at 4:24 am
Hi Krishna,
Need Advice…! My mother sold her property for 2700000(27 Lakhs) and the same has been credited into her SBI a/c by the purchaser. My mother is a house wife. She has spent 1400000(14 Lakhs) for buying automobile. Now she is left with 1300000(13 Lakhs) in her saving a/c in SBI.
For 2700000 she has agreement for selling property. Now she want to FD the remaining amount. Please advice how to go about it?
August 20, 2011 at 3:29 am
Hi,
My Wife had FD and we have submitted form 15G, The FD and associated Saving account did not had PAN no attached, based on that bank has deducted tax @ 20%,
Wanted to know what is the process of getting this tax refunded.
Rakesh