Fixed deposits could offer a reliable way to ensure financial stability. Therefore, understanding the tax implications might be crucial to maximise your returns. In this video, we’ll delve into the basics of fixed deposits and the tax considerations that might impact your earnings.
When it comes to FD taxation, two main aspects stand out: tax on interest income and tax treatment of the maturity amount. Interest income from fixed deposits is taxable based on your income tax slab. This is usually categorised as "Income from Other Sources" on your tax return. Additionally, if your interest income surpasses Rs. 40,000 in a financial year, the bank will deduct a 10% TDS or Tax Deducted at Source. This is adjusted against your annual tax liability. However, the principal amount you invest remains tax-free upon maturity.
This video also covers strategies that could help reduce your tax burden. We’ll talk about options like tax-saver FDs, spreading investments, and exploring senior citizen benefits. These options might offer potential ways to manage taxes on FD returns. Fixed deposits might be beneficial if you seek stability while benefiting from tax-conscious planning.
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