PAN card is a very important document which should be made by everyone. In such a situation, the government has also made it necessary to link PAN with Aadhaar.
New Delhi. PAN card is a very important document which should be made by everyone. In such a situation, the government has also made it necessary to link PAN with Aadhaar. At present, the deadline for linking PAN with Aadhaar has been extended to 31 June 2023. People believe that PAN is necessary only for those people who are earning heavily, but it is not so.
PAN card is a mandatory document for all. To make this more important, the Central Government has also given a special proposal in the Finance Bill for the financial year 2020-21. Apart from this, you must have a PAN card for FD as well.
PAN is necessary for opening an FD account when you make a time deposit of more than Rs 50,000 or more than Rs 5 lakh in a financial year. Explain that if you have got FD done in a banking company, government bank, post office or non-banking financial company, then PAN card is necessary.
FD will be taxed twice if you don’t have PAN
According to Section 194A of the Income Tax Act, TDS is deducted at the rate of 10% if the interest earned on FD exceeds Rs 10,000 in a year. But if you have not given the details of PAN in the bank, then this deduction will be 20 percent.
Please tell that there is some exemption for senior citizens and interest of Rs 50,000 on FD is tax free. If the amount of interest received by you is within the exemption limit and the bank still deducted TDS, then you can claim it while filing income tax return.
This is how tax is calculated on FD
Adds the earnings from FD to your total income every year in the income tax return. Even if you do not get the interest money that year and the bank gives you the money by adding it together on maturity of FD, but you will have to show it in ITR every year.
Banks deduct TDS on your interest, which is later adjusted by the Income Tax Department. If you have FD for 3 years, the bank will deduct TDS in the last of every year. When FD matures, the depositor gets both interest and principal. Additionally, FDs up to Rs 5 lakh are insured by DIGCI.
