Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Direct Tax »
Open DEMAT Account in 24 hrs
 GSTR-3B deadline expired: File now to avoid input tax credit loss, GST registration cancellation
 ITR Filing: Income tax department shortens time limit for condonation of delay What it means for taxpayers
 CBDT launches campaign to intimate taxpayers on undeclared foreign assets in ITR
 ITR AY2024-25: CBDT launches campaign for taxpayers to report income from foreign sources
  CBDT comes out with FAQs on Direct Tax Vivad se Viswas scheme 2024
 CBDT weighs overhaul of designations for income tax officials to secure better clarity
 Direct tax-GDP ratio at millennial high in FY24
 CBDT comes out with FAQs on Direct Tax Vivad se Viswas scheme 2024
 Tax filing: How to choose the right ITR form
 Income Tax Return: How to maximise your tax refunds while filing ITR?
 Last date for filing income tax return (ITR)

CBDT allows AMCs to directly manage offshore funds out of India
May, 20th 2019

Fixed deposits are one of the most secure investment options in the country. Most conservative investors with low-risk appetite prefer to invest in FD as it offers guaranteed returns. It may be noted that while FDs do not offer inflation-beating returns at the moment, it does offer risk-free returns.

If you are investing FDs, here are 5 rules you must know

1. A lot of people believe that they can avoid paying tax in the GD interest if they invest in the name of their non-working spouse or minor child. However, this is a total misconception. If you are investing FDs in the name of your minor child or non-working spouse, the interest earned will be counted as your income and it will be taxed as such.

2. Interest income from FDs is fully taxable. Add the interest income to your total income and you will get taxed at slab rates applicable to your total income. You have to mention the income earned from FD under ‘Income from Other Sources’ in your Income Tax Return. The tax on FD is deducted at source by the bank at the time they credit the interest to your account, and not when the FD matures. For example, if you have an FD for 3 years, the bank will deduct TDS at the end of each year.

3. It is to be noted that even if your bank has deducted TDS, you must report the interest income in your tax return. If you fall in the higher tax bracket of 20 per cent or 30 per cent, you are required to pay the extra tax if your bank has deducted TDS at the rate of 10 per cent.

4. Remember that even when no TDS is deducted on the FD interest income, include the interest income in your total income and pay tax on it. If you wait until the maturity of your FD when interest is actually received, your total interest income might push you up a tax slab and you may end up paying a higher tax.

5. Also not that investing in two branches of the same bank will not help you save TDS on FD as now banks aggregate interest income on all the FDs across branches of the same bank to check if the interest income for the year is more than Rs 10,000 or not.

Worth mentioning here is that if you do not declare the interest income in your income tax return, it may show mismatch in your 26AS statement also known as the tax credit statement and the return filed by you which might warrant a notice from the Income Tax Department.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2025 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting