How to Avoid TDS on Fixed Deposits: Essential Steps
Learn how to effectively avoid TDS on Fixed Deposits with our essential tips and key submission forms.
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To avoid TDS (Tax Deducted at Source) on Fixed Deposits (FDs), submit Form 15G (for individuals below 60) or Form 15H (for senior citizens) to your bank, declaring that your total income is below the taxable limit. Ensure you meet the eligibility criteria before submission. Additionally, choose banks that offer aggregate interest below the TDS threshold or split your FD across multiple banks.
FAQs & Answers
- What is TDS on Fixed Deposits? TDS, or Tax Deducted at Source, is a tax collected by banks on the interest earned from Fixed Deposits (FDs) if it exceeds a certain limit set by the income tax department.
- How can I submit Form 15G or Form 15H? Form 15G is for individuals below 60 years, and Form 15H is for senior citizens. Both forms can be submitted to your bank to declare that your total income is below the taxable limit, thus avoiding TDS on your FD interest.
- What is the TDS threshold for Fixed Deposits? The TDS threshold for Fixed Deposits is typically set at ₹40,000 for individuals and ₹50,000 for senior citizens in terms of interest earned in a financial year.
- Can I avoid TDS by choosing certain banks or depositing in multiple banks? Yes, choosing banks that offer aggregate interest below the TDS threshold or splitting your FD across multiple banks can help you avoid TDS on your interest earnings.