Recurring Deposit Taxes & Fixed Deposit Taxes – How do they work? (RD & FD)

I am sure most of us might have heard about one of the popular savings tool called Recurring Deposit (RD). Infact most of us might have started the investment plan with an investment in RD or Fixed Deposit (FD). These are excellent investment/saving tools to accumulate a corpus for short term goals like creating an emergency fund, creating a corpus to meet Kid’s yearly education fees, saving for big time purchases like LED TV etc., They are safe and provide guaranteed returns.

Financial products like RDs and FDs are very simple to understand and invest. Now, almost every bank provides you the option to invest in these deposits through online mode. Many banks do provide lot of innovative and flexible Recurring Deposits now (For example – ICICI Bank’s iWish Flexible RD). But, when it comes to Recurring Deposit Taxes and Fixed deposit taxes – how they work with respect to tax implications is still a big question mark (confusing point) for many of us.

In this post let us understand – Whether the interest earned on Fixed Deposits and Recurring deposits is tax free? Is recurring deposit interest is taxable or not? How are RD maturity and FD maturity amounts treated in terms of taxation? Should I pay taxes every year on RD/FD or should I pay the income tax on the maturity date of my RD/FD? How is TDS (Tax Deducted at Source) applicable on Recurring deposit (RD) and FD? Budget 2015 – Is TDS now applicable on Recurring Deposits (RDs)? How to calculate interest amount on RD and FD? Do they have any income tax benefits or exemptions?Recurring Deposit taxes savings

From your Income Tax Returns point of view, it is very important to understand the below points. I have seen many investors ignoring (or may be not aware of) the Fixed deposit taxes and Recurring Deposit taxes in their Income Tax Returns (ITR). I am sure you might have heard or seen your friend(s) receiving ‘compliance notices’ from Income Tax department for not showing these Time Deposits (FDs & RDs) in ITRs.

Tax implications on Fixed Deposits

  • There are no income tax benefits or deductions applicable for Fixed Deposits. The interest income earned on Fixed deposits is taxable. (5 year Tax saving Bank Deposit have tax exemption under Section 80c, but the interest income earned is taxable on these deposits too.)
  • Banks do not deduct TDS if the Interest income earned on Fixed Deposits is less than Rs 10,000 Rs 40,000 per year (from AY 2020-21). That does not mean this is a tax-free income in your hands. You still need to add this as ‘income from other source’ when you file your Income Tax Returns. (If the interest exceeds Rs 40,000 in a financial year, the bank will deduct 10 per cent tax before crediting the interest to the account.)
  • Interest income on your Savings Bank Account up to Rs 10,000 is tax free as per Income Tax Act 1961. Do not get confused this with the above point. Interest on your Savings a/c balance is different from the FD interest.
  • Individuals who do not have taxable income and do not have any other source of income can submit Form 15 G (or) Form 15 H (above 60 years old person-senior citizens) to their banks to avoid TDS. NRIs cannot submit these forms. If your interest income itself is above the income tax exemption limit (for a given Financial Year)then you are not eligible to submit these forms. Remember that you need to submit Form 15 G or Form 15H every year. Banks may ask you to mention the details about your other Bank(s) FDs too.
  • If your interest income on a Fixed Deposit is more than Rs 40,000 then you need to show the entire interest income when you are filling your Tax returns. If banks have deducted TDS on this income, you can capture this information in the “TDS Sheet” of your Income Tax Returns form.( Banks deduct TDS on FDs at 10 per cent only if the interest exceeds Rs 40,000 in a financial year. But your actual income tax slab may be say 30%. So, you need to pay the income taxes according to your slab.)
  • An important aspect which one needs to keep in mind is that you have to furnish your PAN (Permanent Account Number) number to the bank. If you fail to furnish the PAN number, the bank shall deduct tax at the rate of 20% instead of 10% generally applicable.

Recurring Deposit Taxes – How do they work?

  • As per the provisions of Income Tax Act, there are certain investments/deposits on which no tax is required to be deducted without any limit of the amount of such interest. Tax is not deducted on any interest paid on any savings account or deposit in any of your recurring deposit account, be it with any bank, or Co-operative credit society or Cooperative bank.
  • Banks Deduct TDS on your Fixed Deposits but not on Recurring Deposits. “No TDS on RD is charged,” this does not mean, it is a tax free income. It’s a misconception.
  • The interest income earned on your RD is not exempted from income tax. It is taxable.
  • You need to add the interest income as ‘income from other source’ when you file your IT returns.

Latest News : The budget 2015-2016 has put RDs at par with FDs for TDS purpose. Banks will deduct Tax Deducted at Source (TDS) on Recurring Deposits too, from 1st June, 2015. Remember, TDS doesn’t end your Tax Liability. Interest on RDs & FDs is fully taxable as income at the rate applicable to you. So even if TDS has been cut, you might have to pay more tax.


Budget 2018- 19 & New Section 80TTB

For Senior Citizens, the Interest income earned on Fixed Deposits & Recurring Deposits(Banks / Post office schemes)will be exempt till Rs 50,000(FY 2017-18 limit is up to Rs 10,000). This deduction can be claimed under new Section 80TTB. However, no deductions under existing 80TTA can be claimed if 80TTB tax benefit has been claimed(the limit for FY 2017-18 & FY 2018-19 u/s 80TTA is Rs 10,000).

Section 80TTA of Income Tax Act offers deductions on interest income earned from savings bank deposit of up to Rs 10,000. From FY 2018-19, this benefit will not be available for late Income Tax filers.

Budget 2018-19 has also proposed to raise the threshold for deduction of tax at source (TDS) on interest income of Bank / Post office / Co-operative Bank deposits for senior citizens from Rs 10,000 to Rs 50,000 (u/s 194A). This is applicable for FY 2018-19 / AY 2019-20. (Related Article : ‘List of Income Tax Exemptions for FY 2018-19‘)

How much Income Tax do I need to pay on FD’s & RD’s interest income?

TDS and income tax slab rate tax liability refund claim for extra tds paid

  • If your taxable income is below Rs 2.5 Lakh and banks deduct TDS (you can submit Form 15 G/H to avoid TDS), you can claim back TDS as refund in your Income Tax Returns (ITR)
  • If your income is between Rs 2.5 Lakh to Rs 5 Lakh, you need not pay any extra income tax. Because, the income tax rate of 10% matches with Bank’s TDS rate which is also at 10%.
  • If your income is in the range of Rs 5 Lakh to Rs 10 Lakh, you need to pay 10.30% beyond the TDS rate.
  • If your income is over Rs 10 Lakh, the differential tax rate is 20.60%.

When to pay income tax on my Recurring Deposit (RD) or Fixed Deposit (FD)?

Now that we are clear about Recurring deposits taxes and Fixed deposits taxes, we also need to understand when to show the interest income for paying the applicable income taxes?. Do we need to pay taxes on this income every year or when the deposit matures?

The answer is, the taxes on Bank FD (over and above the TDS amount) and full tax amount on RD can be paid either in every financial year (or) on maturity. We can choose when to pay the taxes on FD and RD on maturity, instead of each Financial Year. But, once opted (when to pay the taxes) we need to stick to the same method. (Actually in accounting terms these are known as Mercantile’or ‘Cash’ accounting methods).

Is Fixed Deposit/RD Interest Of Minors Taxable?

Sometimes, you may open FD or RD deposit account in the name of your minor kid. If you have opened a FD in your minor child’s name, you need to pay tax on the entire interest income. The income is clubbed with your income.

Another interesting point is, what happens if your child becomes a MAJOR before the FD/RD matures?

In this case, if you have been paying taxes on FD/RD every year, the RD/FD’s interest income is taxable in the your hands as long as your kid is a minor. As soon as he/she becomes a major, it is treated as his/her income. Your child is liable to pay the taxes.

If you chose to pay taxes on FD/RD maturity date, the tax liability vests on you (if your kid is still a minor), else your kid (who is a major) is liable to pay the applicable taxes (if any).

Though it is headache to pay the taxes every year, it is better to show the interest income every year in your ITR. Else, you may receive compliance notice about time deposits for FD/RD amounts (if these are not included in your ITR). (Do not get scared when you receive these kind of IT notices. You can reply to Income Tax department about the method you have chosen. But do reply to these notices.)

How to calculate the interest income on RDs ?

Banks issue/send ‘interest certificate’ or ‘TDS certificate’ on your FDs & RDs every year. So, regarding FDs you are very clear about TDS and there is no confusion regarding the FD interest calculation part also. (Most of the banks have made these certificates available online. You can visit your bank’s website and download them).

Since Banks do not deduct TDS on Recurring Deposits, they do not issue TDS certificates for RD investments. So, the calculation of the total interest income earned on your RD(s) in a given Financial year can be quite cumbersome. (Also, most of the bank offer RDs on a quarterly compounding basis).

I suggest you to visit the below links to calculate the RD interest income.

  • RD calculator (Corporation Bank website) (This RD interest calculator considers investment in BEGIN mode. Lets say you book RD on a monthly basis, then it is assumed that the investments are made in the beginning of every month.) (You need to deduct the total invested RD amount from total maturity amount, to get the interest amount for a specific period.)
  • Freefincal.com

When do you pay FD/Recurring deposit taxes? Do you show the FD/RD interest in your Income Tax Returns (ITR) every Financial year? Do share your views and comments. Cheers!

Continue reading :

(Image courtesy of hin255 at FreeDigitalPhotos.net)

  • Dr. Ashok Kumar T V says:

    Hello Sir

    It would be very much helpful if you could give me an advice on my issue detailed below:
    I had an RD at SBI (earlier SBT) in the name of my daughter. The RD Scheme was presented in 2014 as “TWINKLE” with highlighted benefits that “No tax on Maturity and on completion of tenure Full Maturity Value will be Returned”. My daughter was 12 yrs old in 2014 and I joined the scheme with my daughter as first name and myself second name. The monthly deposit was Rs. 10,000/- for a period of 6 years. But in June 2020 the maturity amount received was lesser by an amount of Rs. 32,000/-. The bank says that tax has been deducted as per the new income tax provisions. My doubts (not yet clarified by the bank) are these;
    1.Is my tax liability is for the interest amount I received from June 2015 only?
    2.The maturity amount was deposited by the bank in June 2020 to my bank account (till that time my daughter had no bank account or PAN card). But the amount is not reflected so far in my 26AS. Does it mean that the tax has not been paid in my name?
    3.My daughter turned 18 only after maturity of the RD (in July 2020 ie; after just 1 month of maturity and she got a PAN Card only after that). Is there any chance of showing the interest amount as income in her name?
    4.As a solution for this, the bank (manager) asked to take a PAN card for my daughter and produce it so that they will try to get the amount refunded through revision of income tax statement filed by them. Is this possible?
    5.As stated earlier the RD scheme named as “TWINKLE” offered that no tax will be deducted. Was it not the responsibility of the bank to inform me (and naturally all such customers) that it has been made taxable and maturity amount will be less than what is claimed in the brochure? Also, I was not given with the option of deciding whether tax to be paid yearly or on maturity. Can I approach Banking Ombudsman seeking a solution for this, based on the above two arguments?

    • Sreekanth Reddy says:

      Dear Ashok ji,
      1 – Yes can be.
      2 – Kindly check with your banker about the non-reflection of TDS in your Form 26AS. Did they issue you Form 16A?
      3 – No, as it is matured before she attained 18 years, hence the income gets clubbed in your name. (But, note that banks generally show TDS in the name of Primary account holder. So, kindly check with them if TDS has been deducted in your name or not??)
      4 – Yes, they (Bank) can rectify the TDS entries. If TDS is shown in your daughter’s name, she can file ITR and claim refund.
      5 – Kindly note that interest income on FD/RD is taxable.

      Related article : 15 Q&As on Fixed Deposit Interest Income Taxation Rules (FY 2020-21)

      • Dr. Ashok Kumar T V says:

        Thank u so much for spending time for me. The comment is much helpful for me to get an insight into my own problem. Thank u..

  • S.K. says:

    I am a retired individual of 61 years old & my income is from INTEREST on FDs & NCDs.

    My question is on method of reporting of Interest on some Fixed Income Instruments which I have recently invested in.

    In the past had requested INTEREST Certificate from my bank for reporting CUMULATIVE 5 year tenure FDs interest income in my ITR.

    However, recently in Jan’19, in the current FY I have invested in the following instruments where interest will be paid/received periodically:

    1) Rs 3L in 3 Companies NCDs where I have opted for the ANNUAL INTEREST payment option. Interest will be received in NEXT FY.

    2) Rs9L in LIC’s PMVVY scheme for Senior Citizens @8.30%, have opted for the ANNUAL INTEREST payment option. Interest will be received in NEXT FY

    3) Rs 15L in SCSS (Senior Citizen’s Scheme) where QUARTERLY INTEREST option is default & 1st Qtrly Interest will be usually credited on 1st April 2019, after the FY end.

    4) Rs 5L in Bank FD where QUARTERLY Interest option was chosen & 1st Qtrly Interest will be credited only in next FY.

    I had planned to report these incomes in next FY only after receiving actial credit. Please advise on how to report in case you do not agree.

    (Both LIC as well as Companies whose NCDs I hold will not provide ACCRUED INTEREST Certificates for tax reporting purposes.)

  • Yank says:

    Does Fixed deposits attract capital gain tax sir ??

    • Sreekanth Reddy says:

      Dear Yank,
      The interest income earned on FDs/RDs is not classified as Capital Gains.
      It has to be declared under the income head ‘Income from other sources’ when filing Income Tax Return.
      Such interest income is taxed at individual’s tax slab rate.

  • swapan kr kar says:

    investments in post offices are in problem because kissan bikass patra term deposit etc are produced by a pssbook where post offices do not show yearly div and int then how a tax payer will show it to i tax return in every year

    • Sreekanth Reddy says:

      Dear swapan ..One can manually calculate the taxes on yearly basis and disclose them in ITR.
      Or can show the accumulated income on maturity date for the concerned Financial Year/Assessment Year.

  • Srajput says:

    Hi Shrikant.
    Thanks for the valuable info. My doubt is if the RD Ac was in name of my husband and he is getting matured amount in cash, can I deposit cash in my Ac and pay tax over interest income in my tie?

    • Sreekanth Reddy says:

      Dear Srajput,
      As the interest amount gets accumulated in his name, it is taxable in his hands only.

  • Katha Niranjan Chandramouli Reddy says:

    Hi Srikanth,
    I own two house,for which i am paying House loan.please suggest how better i can benifit for TDS.please give me clarity on this.
    please do needful

    Thanks
    Niranjan Reddy

  • Ajinkya Joshi says:

    Hi Sreekanth,
    Thank you so much for such a clear guidance. I just want to get a confirmation regarding one Recuring Deposit I had with Post office (5 year RD scheme) which matured in Dec’17. I did not get any yearly interest statement from Post Office and there was no mention about any TDS deduction upon maturity. I got a cheque from post office for the final amount.

    As per my understanding I should compute the interest as

    Interest = Maturity Amount – Total Amount Deposited

    I should then show this interest under the head “Income from Other Sources” and then accordingly pay tax on the same.

    Can you kindly suggest if this is correct or any other way of computation? Also is there anyway to minimize the income tax on this?

    Once again appreciate all the good guidance you have been providing through your blogs.

    Thanks and Regards,
    Ajinkya Joshi

    • Sreekanth Reddy says:

      Dear Ajinkya,
      Your understanding is correct.
      There is no provision to reduce the tax outgo in this case.

      Thank you for your appreciation!

  • KAVYA says:

    hai sir last yeasr i opened R D A/C in Thaigaraja cooperative bank in bagalore 15months i need to pay 2500 some month i am paying later along with 50rs fine that is ok but they are taking 9rs for GST,So for this need to know i need to pay gst for this kindly reply me

  • Khan says:

    Hi Sreekanth.

    My CTC is in between 8 to 9 Lakhs.
    I have home loan upto April and closed the same recently.
    I am having Insurance for 10K per annum and kids school fees.
    I need to come out from TDS please let us know the savings plan in postal to save my TDS

  • Prince says:

    I want to invest on rd in post office for 5 years and want to pay tax on intrest that is earned annually. But post office official says they can only tell the maturity amount and can not give detail of intrest earned every year. How would i be able to calculate annual intrest earned. can i divide the total intrest earned in five years by five and pay tax every year.

  • Marek says:

    Hi Sreekanth,

    I’m a foreign national on a long term student visa and do not have any income here.

    1. How much maximum interest I can earn per year from FDs or RDs without having to pay any taxes?

    2. How much maximum interest I can earn per year from regular savings account without having to pay any taxes?

    3. Would these 2 amounts be considered separately or would they be added?

    • Dear Marek,
      1 & 2 – Up to Rs 2.5 Lakh, but banks can deduct TDS and you can file income tax return and claim the REFUND of TDS (if any).
      Both would be added under the head ‘income from other sources’.
      Kindly note that interest income on Saving account up to Rs 10,000 is tax-free.
      If interest earned is more than 10,000 then balance amount will be taxable as before i.e considered as Income from Sources and taxed as per your slab rate.
      Read : Latest income tax rates FY 2017-18.

      • Marek says:

        Thanks Sreekanth,

        Something is still not clear for me in your answer.

        You say: “1 & 2 – Up to Rs 2.5 Lakh”, which means that for Savings account (that’s point 2) the tax-free interest income would be 2.5 Lakh and at the same time you say : “interest income on Saving account up to Rs 10,000 is tax-free”

        Can you please clarify.

        • Dear Marek,
          The basic exemption limit is Rs 2.5 Lakh, so any income which is below this limit is tax-exempt.
          In case if the interest income on FDs/RDs/Saving account is above Rs 2.5 Lakh it’s taxable income.

          • Marek says:

            Thanks again!

            I must say you have an excellent website covering so much useful information.

            I have another question which I’m not sure where to post, so I’ll ask it here if you don’t mind.

            Do the foreign nationals on a long term student visa and long term residence permit have to file the tax report to ITD over their assets (bank accounts, investments, properties etc.) that they own in their home countries?

          • Dear Marek,
            If you have taxable income in India, when filing your taxes you need to report / declare your Foreign Assets & liabilities in Income Tax Return form.

          • James says:

            Dear Sreekanth,

            Thanks very much for all your great answers. I am similar to Marek, above, same kind of visa and living in India long term–no work, only a small interest income. In 2009 I had one year when I had taxable income in India from an FD. But I then moved that money back to my home country and since then I have had only a few hundred rupees interest annually on my Savings account. This year I received a compliance message from the Tax Dept asking if I had any taxes to pay, and asking that I file a tax return.

            However, when I go to my online account of the Indian Tax website, there is no mention under issues pending for me to answer any question about why I have not paid any taxes. So I cannot reply to their query about not paying any taxes there.

            I am hoping not to have to file a Tax return as I have no future plans to have any taxable income in India for the rest of my life and would prefer not to have to start filing a tax return every year going forward.

            Thanks very much for your insight!

            James

          • Dear James,
            You can a raise a ticket @ e-Nivaran portal quoting your notice details, you may ask the IT dept to provide more details on the compliance notice and the possible resolution.

  • Rahul Kumar says:

    Hi Sreekanth,

    I am looking for a short term investment plans to settle my Bank Loan (5L)

    I don’t have any investments and savings till today, but now I would like to open RD or FD to repay my Loan ASAP. So that I can start saving money for my future.

    Also, I started to earn more from last month. Now I am planning to settle down all my debts and to save my tax

    Please advise.

  • choodamani says:

    Hi

    I am planing to sell my flat owned by me and my husband.

    I request your guidance on the following :

    1. How to get the payment ? Would it be exactly 50% each ?
    2. If I wish to receive 100%, then any clause in the sale deed could be included where my husband’s consent could suitably worded ?
    3. I need some assistance on arriving at capital gain and the corresponding tax that we need to pay. Would you be able to give this support ? If so, please let me your contact details.

    Thanks
    Choodamani

  • KAUSHIKI PADA CHAKRABARTI says:

    DEAR SIR,

    WISH YOU A VERY HAPPY NEW YEAR. AGAIN I AM DISTURBING YOU.

    I MADE SOME FD IN THE NAME OF MY MOTHER (AGED ABOUT 70 YEARS) AND ACCORDING TO YOU THE MATURITY AMT. IS TAXABLE IN THE RESPECTIVE FY.

    AM I RIGHT? LOOKING FOR YOUR EARLY REPLY.

    • Dear KAUSHIKI,
      Happy new year to you too 🙂
      In fact, it is accrued interest. For ex : if you book 3 year FD, then every year interest gets accrued, which can be declared in ones Income tax return. Bank also issues TDS certificate based on which you can disclose the income.

  • Abhijith says:

    Hi Sreekanth,

    Please clarify my doubt, I had done Tax saving FD (5 yrs lockin period) on Jan 10th 2017, So can i claim it under section 80C for year 2016-2017 is this get eligible ? or do i need to wait to claim this for next year (2017-2018)

    Thanks,
    Abhijith

  • Manoj says:

    Hi,

    I have a RD(for 57 month) 2000 per month since April-2012, now it will mature in Jan-2017 with amount 142000. Please let me know TDS is applicable or not as it was introduced from April-2015.
    As per my understanding, principle amount should be considered as amount till March-2015 and then Interest on this amount should be considered for TDS.

    Please confirm.

    Thanks
    Manoj

  • Keshav says:

    Hi ,

    I come under 20% Tax Slab limit. I had given 15 G signed to some banks & because of that they didn’t deduct TDS on my FDs even though interest earned is more than 10K. I can see the details now from 26AS.

    1. Is it OK to pay the Tax now & show it in ITR returns.
    2. Is there any way to cancel the 15G signed which I had handed over to bank..

    Thanks,

  • Abhishek kumar says:

    Sir,
    I have an FD of rs1,00,000 in a bank. For AY 2014-15 TDS rs1,202 was deducted but at that time i didn’t knew what was TDS. Can i claim its refund now.

    • Sreekanth Reddy says:

      Dear Abhishek,
      Did you check the intimation sent by the IT dept specifying the sum determined to be payable by, or the amount of refund due to, the assessee (u/s 143)? If so, you can file rectification return and claim the refund.

      • abhishek says:

        Sir,
        My income is below 2.5 lakhs and I don’t file returns. I came to know about tax deduction only 2 weeks back.

        • Sreekanth Reddy says:

          Dear Abhishek
          In one financial year you can file your IT Returns for previous 2 financial years. For example – in the FY 2016-17, up till 31st March 2017, you can file return for the previous 2 financial years 2015-16 and 2014-15. So, ITR of FY 2013-14 can’t be filed now.

  • suman says:

    Sreekanthji…i had a quiries..
    Suppose my income is 4 lakhs/annum than i eligible to pay tax on rest 1.5 lakhs. And suppose i start a RD for 5 years whose matured value is 7 lakhs 20 thousands. Now my question are as below.
    question no. 1: So i am liable to pay Rs.15000 as income tax.if i have 30 thousands insurance coverage by LIC than how much tax i have to pay?
    Question no 2: Bank will deduct 10% TDS on matuirity value or yearly basis if interest income exceeds 10000 per year?. Now the fact is for RD bank will give interest on matuirity -than how do i understand that what is the yearly interest generated?
    Question no 3: If bank will deduct 10% TDS on RD which is more than my calculated income tax than how do i get return my extra deducted money?
    Question no. 4: If Insurance coverage is more than deducted TDS & income tax -than what should i do? Also if i opened PPF a/c than how do i use its benifit on income tax.

    • Sreekanth Reddy says:

      Dear Suman,
      1 – Kindly use this tax liability calculator, click here..
      2 – TDS is deducted on Yearly basis, based on that you can find out the total interest amount credited on such deposit.
      3 – You can file your income tax return, provide the TDS details and claim the extra TDS amount (if any) as REFUND.
      4 – You can claim life insurance premium amount and PPF contributions as tax deductions u/s 80C. This will reduce your tax liability.

  • PRASANTA SEKHAR DEO says:

    Dear Sir,

    Please inform me,
    I have a Postal RD account amounting 8000 (Eight thousand) per month .
    opening date -may-2014. Now the accumulated principal amount is growing year wise, so interest al so increase. So please conform now, I have to submit form 15G or Not required.

  • Mohammed Jaffer says:

    Hi Mr. Sreekanth,

    Can you please tell me whether income tax department will consider the amount of fixed deposits and liquid cash deposited in a bank account as one

    Example, if i have 3 lakhs as fixed deposited amount and 3 lakhs as liquid cash in my savings account then will it be considered as 6 lakhs in my account or they will count that in two separate amounts

    • Sreekanth Reddy says:

      Dear Mohammed,
      As long as you file your returns honestly and your sources of income are legitimate ones, kindly do not worry about all these sort of things 🙂

  • kavitha says:

    Hi,

    I have an RD in my daughter’s (aged 8 years) name and TDS was deducted since I did not furnish the PAN while opening the RD acct. Now the TDS is not reflecting in my 26AS even though my PAN is submitted in the Bank. Bank people are asking me to give my daughter’s PAN but since she is a minor we cannot claim refund. How do I proceed to get my refund?

    Thanks,
    Kavitha

    • Dear kavitha,
      As you have submitted your PAN now, you may ask your banker to revise the e-TDS return and issue Form 16A.
      You can claim the refund in your name by clubbing the interest income to your taxable income.

  • shishram chahar says:

    sir i have opened a flexi account and my total amount was 21000 without interest but when i was closed it than i have got the total amount is 18700 only so can you tell me please that how is possible the deduct of actual amount . how can i refund my actual amount and TDS.
    thank you

  • Vishnu K.Verma says:

    Dear Sir,
    I have file return for the AY 16-17.
    In interest certificate INT Paid & INT Accural is shoing.
    Which one i have to take in income from other source.
    or should i take income from 26 AS?
    Please advice,

    Regards,
    Vishnu K.Verma

  • Kyem M Ghosh says:

    Hello Sreekaanth,

    I am currently 23, student, and have no proper income. Sometimes I do freelancing and earn money which are transferred to me as NEFT those are normally 4000-5000 per month. I use this money for my monthly expenses.
    Next instance is I have around 1lakh in two of my bank accounts. Now from this 1 lakh, I will be investing 5000 per month for RD, that is 60000 would be my principal amount, and 645000 as my maturity amount considering 7.5% interest.
    This is all the income which I have currently. Now I would to apply for a credit card (as that would help me buy things at EMIs and would be easy for me to pay) and Axis bank wants my ITR statement. If I file ITR with these income details as I said above, will any TAX amount be charged against me??

  • Anikit says:

    Dear Sir,

    My father was expired last year oct.2015. he was in a PSU. We recieved Rs.80 lacs on behalf of his PF,Gratuity and LIC which are deposited to my mother’s saving account(also avail RD facility on A/C) . My mother is a house wife.
    Now she is getting interest on that amount and she also submitted 15G and 15H forms with PAN card details.
    Does she need to fill ITR on interest received?, if yes then how much tax she needs to pay?

  • BHARAT says:

    sir i want to invest 7 lac in fd in sbi, i am a student and this money i got as a gift, so i want to know whether i have to fill any form for the tax deducted on income from interest or bank will credit the interest after deducting the tax.or there will be any problem if i invest entire amount in one fd or its better to invest in multiple fd please reply asap and thank u

  • Gautham says:

    Hi Sreekanth,

    I am a PG student and have an FD of 5 lakhs. I earns around Rs 40,000 every year as interest and don’t have any other income sources. Still, TDS was deducted.

    So when I file ITR, how do I claim the amount back?

    Thanks,
    Gautham

    • Dear Gautham,
      You can show the interest income under the head ‘income from other sources’ of ITR and TDS details in ‘taxes paid & verification’ sheet. The refund amount will be reflected in ITR.
      The last date for filing ITR for AY 2016-17 was Aug 5th.

  • Kumar says:

    Hello Sir,

    A small doubt. I am salaried person. My wife is homemaker and no sources of income.
    Suppose i give 10,000 every month to my wife and she opens an RD account (10k montly, for 60 months), will there be TDS and does she need to file ITR

  • J.Mahes says:

    I am house wife.if i do fixed deposit 5 lakhs for 1 year , do i need to pay taxes even i am not a tax payer, it can be trouble for me ?? kindly let me know.

  • Varun Kumar says:

    Sir
    I am having 2 FDs and 2 RDs of tenure 5 years. The accrued interest on these saving is 35ooo for the year 2015-16. I am a salaried person and my yearly salary is 300000/- . Please guide whether i have to pay tax every year or should i pay at maturity. How can i justified the same to income tax department if i get the notice.

  • Monu says:

    Dear Sir
    I am a student and I have Done 3 FD’s(10+13+70) this Year And have a balance of 2500₹ in my saving a/c. I want to know that How Much tax will be deduct from my a/c and why and why not Pls Tell me Sir!

  • Tin says:

    I have income only from bank FDs and have already submitted form 15G in each bank at the beginning of the year. Because of this, there was no TDS. I am declaring accrued interest during the financial year as “Income from Other Sources” in ITR1. As there was no TDS, is it required for me to fill details in schedule TDS2? Schedule TDS2 shows some details (with Nil TDS) prefilled while others need to be added manually, if I need to provide all the details. Please Advise.

  • Abi says:

    Sreekanth,

    For me TDS deducted on my RD and I got form16A, But I dont know how and where to declare that in ITR (Income Details tab – Income from other sources (Ensure to fill sch TDS2) and please suggest is there any way to refund that RD’s TDS
    ** Note: that sch TDSs deducted mentioned in Tax Details

    Please suggest

    • Dear Abi ..Yes, you can mention it in TDS-2 section and also include such interest income in ‘other sources of income’ as part of your taxable income.

      • Abi says:

        If I add that RD’s interest income in Other sources of income (16701 rs/-) – It shows in Tax Payable value (1770)

        But Its already deducted from my Bank account where RD is there.

        Please suggest

        • Dear Abi ..You need to add the income under ‘income from other sources’ and at the same time disclose the TDS details in ‘taxes paid & verification’ section of your ITR.

          • Abi says:

            Thanks Sreekanth. I have added that income under income from other sources
            How to disclose the TDS details in ‘Taxes paid & verifi’ section…It shows tax payable (Tax for RD interest) in that section

            Please suggest

          • Abi says:

            Actually my doubt is if that TDS is deducted from bank also we need to pay the amount while filing ITR

          • Dear Abi,
            Kindly understand that you are just disclosing the already deducted TDS details (deducted by your banker) by providing such information in ‘taxes paid & verification’ section.

  • Dr. D. N. Murthy says:

    I need clarification on the following. Say, i have a deposit of 300000 in a bank that earns me 7.5 percent interest. This would amount to 22500 as interest. What would be the tax on this amount that the bank deducts.
    I am in the 20 percent tax range with an annual income of say 800000.
    Is this 10 percent of 12500 ( 22500- 10000) ..which will be ruppees 1250.

    • Dear Mr Murthy,
      TDS is deducted by banks on the total interest income ie 10% of Rs 22,500.
      But interest income on FDs is taxable as per your income tax slab rate.
      So you have to pay balance tax dues when filing your income tax return, if you are in 20% tax slab rate.
      Read: TDS & Misconceptions.

  • Ashish says:

    HI Sreekanth…do i have the choice of paying tax on FD in the year it gets matured. Will it be a IT rule violation if the Tax is paid when the FD is maturing…if no…than can we take the advantage of TDS deducted by bank in the year while filing the return when FD matures… Regards Ashish

    • Dear Ashish,
      It is not a violation. But it is better to pay the taxes on the interest income as and when it is accrued.
      This is due to the fact that Banks deduct TDS amount (if any) and it gets reflected in Form 26AS.

  • Dolly says:

    Hi Sreekanth, I have an RD for which i have received form interest certificate this year. i will be showing it under income from other sources. How should i handle the interest earned for the previous years? i have not shown them in the earlier returns. Thanks

  • Deep Shah says:

    I want to file ITR – I (Sahaj) of last 3 years. My total income is below taxable income tax slab i.e below Rs.250000. So my query is that whether late filing return penalty is applicable. If yes than how much?

    Thank you in advance.

  • Smitha says:

    Sir,

    Will you please clarify whether the monthly installments into my RD a/c itself will be considered as my income and whether i have to pay tax for them in addition to the interest earned on them? . similarly i have opened an FD in the fin year 2015-16. Whether i have to consider this FD amount as a whole as my income or i have to pay tax only on the interest earned on it?

  • Anonymous says:

    How to show FD which have interest less than 10000 in the ITR form

  • Rakesh says:

    Hi Sreekanth,

    Congratulations on the good job you are doing.
    I have a query on TDS on bank fd interest income.
    My form 26as is reflecting interest income earned on fd from two different banks which is roughly just above 10000 each.
    Out of these two for one FD TDS @ 10% was deducted and for other its not.
    So when filing the ITR1, in income from other sources field do we need to show the consolidate interest income earned from both the banks or only that income for which the TDS was deducted?
    If latter is true, then do i need to delete the the other bank details(which did not deduct TDS) from Sch TDS2?
    Since i fall in 20% bracket i will end up paying more tax, so paying self assessment tax and the same should be entered in Sch IT section Tax details tab so that the tax payable will be NIL, is my understanding correct?
    Please advice.

    Thanks.

  • arpit rathore says:

    sir i have only income from fix deposit but bank deducted TDS on FD. how can i refund my TDS. when i fill ITR-1 sahaj it need employer TAN no. but i am not employee of any office. what to do ?

    • Dear arpit,
      You need to provide the TDS details under ‘Schedule TDS2 Details of Tax Deducted at Source on Income Other than Salary [As per Form 16 A issued by Deductor(s) like Banks].

  • Sankar says:

    I am a NRE working in Gulf. I have NRE account. Recently I have opened a RD account in my son name, who is also staying in the Gulf only – school going. Bank has opened this RD as General Public. Funds to this RD account is from my NRE account on monthly basis. Is this RD on my son name is taxable in India ?

    • Dear Sankar,
      If the investments towards your deposit installments come from the NRE Accounts then the interest from an NRE RD is free from tax in India. Also, it is freely repatriable.

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