Many major banks of the country, including the country's largest bank State Bank of India (SBI), Axis Bank, HDFC and ICICI Bank, have increased the interest rates of fixed deposits, ie FDs. In such a situation, if you are planning to get FD, then you should know about the interest rates of banks before this. We are telling you about the interest rates of other major banks including SBI, so that you can invest at the right place according to you.
The interest earned from FD is fully taxable. Whatever interest you earn on FD in a year, it gets added to your annual income. Based on the total income, your tax slab is determined. Since the interest income earned on FD is considered as "Income from other sources", it is charged under Tax Deducted at Source or TDS. When your bank credits your interest income to your account, TDS is deducted at the same time.
Banks do not deduct TDS on Fixed Deposits if your total income is less than Rs 2.5 lakh in a year. However, for this you will have to submit Form 15G or 15H. In such a situation, if you want to save TDS, then definitely submit Form 15G or 15H.
TDS is not deducted if your interest income from all FDs is less than Rs 40,000 in a year. On the other hand, if your interest income is more than Rs 40,000, then 10% TDS will be deducted. Bank can deduct 20% for not giving PAN card.
This limit for deducting TDS on interest income above Rs 40,000 is for people below 60 years of age. On the other hand, the income of senior citizens above 60 years of age up to Rs 50,000 from FD is tax free. 10% TDS is deducted if the income is more than this.
If the bank has deducted TDS on your FD interest income and your total income is not subject to income tax, then you can claim the deducted TDS while filing tax. This will be credited to your account.