Interest from Fixed Deposit, Savings Account

Is interest from Fixed Deposit is taxable?

1. For Fixed Deposits :
1. Yes. It is taxable as per the Income Tax rates applicable to the concerned individual.
2. For Savings Account :
1. Up to 31.03.2012 – Yes, all the Interest received in your Savings Account is taxable as per the Income Tax rates applicable to the concerned individual.
2. From 01.04.2012 – Interest received up to Rs. 10,000/- is Tax free. Any Interest received beyond Rs. 10,000/- will be taxable as per the Income Tax rates applicable to the concerned individual.
For Example : 
Total Expected Interest on Savings Account [All Accounts put together] (A) = Rs. 20,000
Tax Free Interest (B) =                                                                              Rs. 10,000
Taxable Interest (A) – (B) =                                                                       Rs. 10,000

Will TDS be deducted on the interest of Fixed Deposits?

Yes, if the interest received in the Financial Year exceeds Rs. 10,000/- , TDS will be deducted by the Banks/Financial Institutions.

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What is the proof of TDS deducted by the Bank?

1. The Bank/Financial Institution is supposed to provide you with a Form-16A mentioning the details of interest payments made to you & the taxes deducted.
2. This Form – 16A is provided every quarter as per the dates stipulated by the Income Tax Department.

Period	Due Date
1st April 2012 to 30th June 2012	31st July 2012
1st July 2012 to 30th September 2012	31st October 2012
1st October to 31st December	30th January 2013
1st January 2013 to 31st March 2013	30th May 2013

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Will TDS made by the bank appear on my Form – 26AS?

Yes, all taxes deducted on your behalf will be reflected on your Form – 26AS. It usually takes 2-3 months time to be reflected on Form – 26AS.

Note:  You should have provided your PAN number for this.

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I am a senior citizen and my income is below the taxable limit. Still does the bank have to deduct TDS?

1. If your income is below the taxable limits, you can provide a declaration on Form - 15G or Form - 15H as applicable.
1. Form – 15G: For Individuals below 60 years. See Form - 15G
2. Form – 15H: For Individuals above 60 years. See Form - 15H
Note : Only eligible person should furnish 15G/15H.

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What is the amount of TDS deducted?

Description	Percentage of Deduction
Individuals who have furnished their PAN details	10% of the Interest earned
Individuals who have not furnished their PAN details	20% of the Interest earned
Individuals who have provided Form 15H/15G	0% of the Interest earned