Will Rs. 6 lakhs FD for 333 days accrue TDS at 7.4%?

Ans: The bank will have to correct the TDS paid by filing a revised TDS return which will reflect in your 26AS and then only the issue will be solved.

Ans: Hello Amit,

I understand your concern and it's great to see your proactive approach towards tax compliance.

As per the Income Tax Act, banks are required to deduct TDS on interest income when it exceeds Rs. 40,000 in a financial year (Rs. 50,000 for senior citizens). This is an automated process and banks follow this rule strictly.

However, if you wish to have TDS deducted even when your interest income is below Rs. 40,000, you may not be able to do so through the bank directly as their systems are designed to comply with the existing tax laws and automatically deduct TDS only when the interest income crosses the specified threshold.

That being said, you can still manage your tax liability effectively. You can calculate the tax on your interest income and pay it as Self Assessment Tax or Advance Tax, as applicable, through the Income Tax Department's e-payment facility. This way, you can ensure that your tax payment obligations are met in a timely manner.

Please consult with a tax advisor or chartered accountant for personalized advice based on your specific circumstances.

I hope this information is helpful.

Ans: You're right. Based on IT rules, TDS on FD interest might not have been applicable in your case. Here's a breakdown:

• TDS on FD Interest: There's no TDS deduction if the total interest earned from all your FDs with a bank is less than Rs 40,000 in a financial year. This limit is Rs 50,000 for senior citizens (aged 60 years and above).
• Form 15G/15H: By submitting Form 15G (for individuals below 60) or 15H (for senior citizens) in April 2023, you declared your income to be below the taxable limit. This should have exempted TDS on FD interest for the entire financial year (April 2023 - March 2024).

Possible Reasons for TDS Deduction:

• Crossed Interest Limit Misunderstanding: The bank might have mistakenly considered the total interest earned across all your FDs for the entire financial year (April 2023 - March 2024) and deducted TDS once it exceeded Rs 40,000 (or Rs 50,000 for senior citizens) from October 2023 onwards.
• Form 15 Not Processed: There's a chance your Form 15G/15H wasn't processed correctly by the bank.

Resolving the Issue:

• Contact the Bank: Reach out to your bank's customer care or branch manager and explain the situation. Mention you submitted Form 15G/15H and your income is below the taxable limit.
• Provide Documents: If needed, share a copy of your Form 15G/15H submission proof.

The bank should investigate and potentially reverse the deducted TDS.

Additional Notes:

• It's good practice to keep a copy of any forms submitted for future reference.
• If you still face issues, consider seeking guidance from a tax consultant.

Ans: Hi
Assuming that the interest is out of deposit with an eligible institution viz., Bank, Coop Bank & Post Office, the threshold amount is Rs. 40,000 otherwise the threshold would be Rs. 5,000. If your interest is from the eligible institutions then you will need to speak with them.