How to Avoid TDS on Fixed Deposits: Expert Tips
Learn effective strategies to avoid TDS on your fixed deposit investments and maximize your returns.
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To avoid TDS on fixed deposit: 1. Submit Form 15G/15H (if you're eligible) to your bank to declare that your income is below the taxable limit. 2. Invest in tax-saving fixed deposits that offer deductions under Section 80C. 3. Opt for fixed deposits in the name of a non-working spouse or minor child to leverage lower tax slabs and avoid TDS.
FAQs & Answers
- What is TDS on fixed deposits? TDS, or Tax Deducted at Source, on fixed deposits is a tax that banks deduct on the interest earned if it exceeds a certain limit set by the Income Tax Department.
- How can I reduce TDS on my fixed deposit interest? You can reduce TDS by submitting Form 15G or 15H to your bank, investing in tax-saving fixed deposits under Section 80C, or opening accounts in names of lower-income individuals.
- Eligibility criteria for Form 15G and 15H? Form 15G is for individuals whose total income is below the taxable limit, while Form 15H is for senior citizens who wish to avoid TDS on their interest income.
- What are tax-saving fixed deposits? Tax-saving fixed deposits are special FD schemes that allow investors to claim tax deductions on investments up to a specified limit under Section 80C of the Income Tax Act.