Interest From Fixed Deposit, Saving Account

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Some might wonder if the interest obtained from a fixed deposit account in India is liable to being taxed; the answer to this question is yes. The interest is to be taxed according to the rates of tax income of an individual. One of the other questions asked is whether or not the interest from the saving account is taxable and the answer to this question is simply yes. The interest a saving account receives according to the rates of tax income is applicable to a particular individual.

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As from 1stApril 2012. The interested on money up to Rs.10000 is not liable to taxation. However, any interest beyond this amount is liable to taxation according to the rates of income tax of a particular individual. All accounts put together, the total amount of interest to be expected is Rs. 20000. The amount that isexempted from being taxed is Rs.10000. The taxable interest is Rs.10000.

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The financial institution or bank is responsible in providing a form that mentions all the details on the payment of interest made and the also the information on the taxes deducted. The form is to be provided every quarter according to the stipulated dates by the tax income. That is in April to June, July to September, and October to November and then the last quarter is January to march. The form that is related to this is 16A however the deducted TDS may as well appear on the individual form which is 26AS. It is advisable for one to receive the related form 16A. An individual is required to avail their PAN numeral to the concerned bank.

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The total of TDS deducted depends on several conditions. This conditions are such as all the person who have well-provided their PAN information only 10 % of their earned interest is deducted, all persons who have not adequately given out their PAN information, they are deducted 20% of the earned interest and lastly all persons who have gave out form 15H or 15G are not deducted any amount.

The amount of tax a person should pay on a saving or fixed account it all depends with their tax slab. For example a person earns Rs.200000 and the income interest is 20000 therefore ones total income will be Rs.220000. When you subtract section 80C[B], which is Rs.40000 from section 80D[C] which is Rs.5000. The remaining balance will be Rs.175000. Therefore, this amount is not applicable to taxation.

 

All the interest on the money an individual receives is prone to taxation according to the tax slab the amount falls in. As from 1 st June 2015, the TDS are being deducted on the RD earning interests which are exceeding Rs.10, 000. During tax deductions the total savings of an individual in terms of the earned interest will be summed up and all of it will be included in the deductions. These tax calculations should be done by a professional tax auditor. This promotes accuracy of the tax results. An individual should carefully keep up with tax deductions carried out to ensure they are done properly.

Posted in Tax.