Most of the people are distress from the process to get an income tax refund from the income tax department. You all know when we open a fixed deposit account in the bank, the TDS will be deducted from interest paid on your fixed deposit. In this article, I will tell you, how to prevent TDS from your interest income in some conditions. Otherwise It will be mandatory for banks to deduct TDS.
TDS Procedure on Fixed Deposit.
- If the total interest will be above Rs. 10000/-;
- 10% TDS on Interest Amount;
- Bank will pay remaining amount after deduction TDS (Interest = 20000- TDS= 2000) remaining amount will be 18000/-;
- For getting refund of Rs. 2000/-, you have to file the income tax return.
What to do to avoid TDS on Fixed Deposit?
- TDS is deducted at the branch level. So you should break-up the aggregate in fixed deposits into various branches.
- You can submit form 15H. Read more about of form 15H. You can submit form 15 H if you have not any taxable income in previous year. This form is for above 65 years individuals.
- You can submit form 15G. Read more about of form 15G. You can submit form 15 G if you have not any taxable income in previous year. This form is for below 65 years individuals.
- All above forms should be submitted before 31st march in the bank. The bank will not deduct TDS.
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{ 5 comments… read them below or add one }
thanks for providing me this large and important information.
with regards
Yatbeer
The Form 15G or 15H is to be submitted to bank before the ending of the quarter. Since quarterly returns should be submitted to department by the bank
Thank you for the article…here is one article explains the form 15g and form 15h:
http://www.thinkplaninvest.com/2009/08/what-you-should-know-about-form-15g-and-form-15h/
Thanks,
Krishna
If I have interest income more than 100,000 in a year and have no other income. Will I get refund of 10000 all ? If yes, what is the process for this.
This information is really cool way to avoid TDS .