Income Tax / TDS on Bank FD

   Income Tax on interest 

   income from Bank FD

                                    by Rajeev Pathak

Someone has asked, 

" Das lakh ki FD karane par income tax se kaise bache mai ek house wife hun."

Ans. 

  First of all, interest income from bank's FD (Fixed Deposit) is taxable and chargeable at the rate of income tax applicable to a particular tax payer.  As on 19^th August,2020, interest rates for 1 year Fixed Deposit (FD) are in the range of 5 to 6% in most of the banks. Sr. Citizens get  half a percent more. So,  for an amount of Rs. 10,00,000/- interest amount comes in between 50,000/- to 60,000/-. For the Financial Year 2020-21 (Assessment Year 2021-22), Income Tax exemption limit is Rs.2.5 lacs for people below 60 years and Rs. 3 lac for Sr. Citizens (60 years and above, but less than 80 years). For Super Senior Citizens (80 years or more), tax exemption limit is Rs. 5 lac. If you do not have any other income except the interest amount as mentioned above in question , you may fill up Form 15G / 15H and submit to your bank advising that your net taxable income is not exceeding  prescribed limits, as applicable to you. Bank will not deduct TDS (Tax Deducted at Source) from interest paid / payable to you. Please also note that Form 15G/15H  is to be submitted every financial year during currency of your deposit, if your income is within exempted tax limit. However, it is advisable to file your ITR (Income Tax Return) . If TDS is already deducted, you may claim refund of the same by filing your ITR. This reply is based on the data and information made available in this particular question. For more specific guidance, you are advised to contact your  tax consultant.