Fixed Deposits

Interest earned from Fixed Deposit

Income/Interest earned from 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 amount. This process is called as Tax Deduction at Source(TDS). Interest in excess of Rs.10,000/- only TDS comes into picture otherwise you do not have to worry about TDS. But, there is cases where the TDS is not applicable but still the banks may cut the income. It can be avoided if you act wisely and submit Form 15H (who is above 65 years) or Form 15G for others.
Suppose you do not have PAN or not submitted the PAN then you will be deducted TDS at the rate of 20% of your interest earned during the year.

If you have any doubts please e-mail to srinathkr@yahoo.com