FD Rules Tax Rules: If you have got FD done to get good returns, then you should also know the tax rules related to it. Otherwise you may have trouble ahead.
Often people take the help of FD to invest and the special thing about FD is that not only does it give good returns, but money is also safe in it. That’s why people keep their money safe through fixed deposits. This gives good interest on it, but do you know that you also have to pay tax on the interest earned on it. If you have got one or more FDs then you need to know what are the rules regarding FD tax.
In such a situation, know what are the rules regarding FD and when you have to pay tax on money from FD. Also know that after how much FD you have to pay tax and what are the rules of FD tax, which every FD holder should keep in mind. Know these rules related to FD…
What are the rules related to fixed deposits?
Tax rules related to fixed deposits are different and tax is deducted on FDs accordingly. If the interest earned in a year is more than 40,000 then tax will be deducted. That is, understand that if you get more than 40 thousand interest on FD, then you have to pay tax in it. However, for senior citizens, this limit is 50,000. If the interest is less than this, then they get tax exemption up to this amount.
According to the report of Money9, there should never be such a mistake that if TDS is not deducted then tax will not have to be paid. If you earn more than 40,000 on FD, then tax will have to be paid on it. If you have kept more than one FD in any bank, then tax will be deducted if the total interest on all that FD is more than 40,000. There will be relief from TDS on the interest income of FD if it falls in the income-exempted slab. For TDS not to be deducted, Form 15G/15H has to be submitted with the bank.
How much will the tax be?
Normally banks deduct 10% TDS on interest income, but if you fall in the tax slab of 20 or 30% then you will have to pay additional tax. The interest earned on FD is taxed according to the slab rate and surcharge. Suppose there is a total income of Rs 10 lakh in a year, then it will come in 30 percent tax slab. If the FD interest earns Rs 1 lakh, then tax of Rs 31,200 will have to be paid along with 30% tax and 0.4% cess.