How to Avoid Tax Deduction at Source (TDS) on Bank Fixed Deposit?

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.

1. If the total interest will be above Rs. 10000/-;
2. 10% TDS on Interest Amount;
3. Bank will pay remaining amount after deduction TDS (Interest = 20000-  TDS= 2000) remaining amount will be 18000/-;
4. 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 31^st march in the bank. The bank will not deduct TDS.

Related posts:

1. Latest Bank Fixed Deposit Rates – FD Rates
2. Tax Saver Fixed Deposit (FD): Tax Benefits
3. Bank Term Deposit Scheme
4. Tax Only When Interest Credited to Fixed Deposits: CBDT
5. All About of Form 15G and Form 15H