Understanding the TDS on your FD’s interest could be essential for effective financial planning. In this video, we’ll simplify the concept of TDS on fixed deposits.
We’ll begin with an example where if your annual FD interest crosses Rs. 40,000, banks or financial institutions might deduct 10% TDS. This limit is raised to Rs. 50,000 in the case of senior citizens. For instance, if your FD interest amounts to Rs. 45,000, Rs. 4,500 will be deducted as TDS, leaving Rs. 40,500 credited to your account. This system is in place so that taxes are paid at the source, reducing the burden of lump-sum payments later.
We’ll also discuss how this deducted amount is deposited with the Income Tax Department and its impact on your tax liability. If your total income falls below the taxable threshold, you could file an income tax return to claim a refund on the deducted TDS. Additionally, we’ll share tips on how you could monitor your TDS deductions and leverage tax-saving opportunities. Understanding TDS might help you ensure your investments yield maximum returns.
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