What is the TDS Rate for Interest Income in India?
Learn about the TDS rate for interest income and how to avoid higher deductions.
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The TDS (Tax Deducted at Source) rate for interest typically stands at 10% if your interest income exceeds a specified limit in a financial year. Ensure to provide your PAN to the bank to avoid higher TDS deductions at the rate of 20%. Always check current financial regulations for updates.
FAQs & Answers
- What is TDS on interest income? TDS on interest income is the Tax Deducted at Source deducted by banks and financial institutions on the interest earnings above a certain limit, typically at a rate of 10%.
- Why do I need to provide my PAN for TDS? Providing your Permanent Account Number (PAN) to the bank is essential to ensure that TDS is deducted at the lower rate of 10%. Without your PAN, the TDS will be deducted at a higher rate of 20%.
- How can I check the current TDS rates for interest? You can check the current TDS rates for interest by visiting the official website of the Income Tax Department or consulting with a tax professional.
- What happens if my interest income is below the specified limit? If your interest income is below the specified limit, TDS will not be deducted, and you will receive the full amount of interest income without any tax withheld.