What is the Tax on a 20 Lakh Fixed Deposit in India?
Learn how tax is applied on interest earned from a 20 lakh FD based on income slab and TDS rules for residents and senior citizens.
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The tax on a 20 lakh FD depends on your income tax slab and whether the interest exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). Interest from FDs is taxed under the head 'Income from Other Sources' and is added to your total income. Tax rates as per your applicable slab rate apply. TDS is deducted at 10% if PAN is furnished; else, it's 20%. Remember, to avoid TDS, you can submit Form 15G/15H if you meet certain conditions.
FAQs & Answers
- Is the interest earned on a fixed deposit taxable? Yes, interest earned on fixed deposits is taxable under 'Income from Other Sources' and is added to your total taxable income.
- What is TDS on fixed deposit interest and when is it deducted? TDS (Tax Deducted at Source) on FD interest is deducted at 10% if your PAN is furnished; otherwise, at 20%, applicable when interest exceeds ₹40,000 in a financial year (₹50,000 for senior citizens).
- How can I avoid TDS on fixed deposit interest? You can avoid TDS by submitting Form 15G (for non-senior citizens) or Form 15H (for senior citizens) if your total income is below taxable limits, subject to conditions.