New Delhi9 minutes ago
- copy link
The country’s largest public sector bank State Bank of India (SBI) has increased the interest rates on fixed deposits (FD). SBI has increased the interest rate on FD from 46 days to 179 days from 4.75% to 5.50%. Whereas on FD from 180 days to 210 days, now it is 6.00% instead of 5.75%.
Similarly, on FDs of maturity period between 211 days to less than 1 year, interest will now be 6.25% instead of 6.00%. There has been no change in the interest rates for the remaining period. These interest rates have come into effect from May 15. These interest rates are for FDs of less than Rs 2 crore.
Tax has to be paid on the interest received from FD also
The interest received from FD is fully taxable. Whatever interest you earn on FD in a year is added to your annual income. Based on the total income, your tax slab is determined. Since the interest income earned on FD is considered “Income from Other Sources”, it is charged under Tax Deducted at Source or TDS. When your bank deposits your interest income into your account, TDS is deducted at the same time. Let us know some points related to tax on FD:
- The bank does not deduct TDS on fixed deposits if your total income is less than Rs 2.5 lakh in a year. However, for this you will have to submit Form 15G or 15H. In such a situation, if you want to save TDS then definitely submit Form 15G or 15H.
- If your interest income from all FDs is less than Rs 40,000 in a year, then TDS is not deducted. Whereas if your interest income is more than Rs 40,000 then 10% TDS will be deducted. Bank can deduct 20% for not giving PAN card.
- This limit for deducting TDS on interest income more than Rs 40,000 is for people below 60 years of age. At the same time, income up to Rs 50 thousand from FD of senior citizens above 60 years of age is tax free. If the income is more than this, 10% TDS is deducted.
- If the bank has deducted TDS on your FD interest income and your total income does not come under the ambit of income tax, then you can claim the deducted TDS while filing taxes. This will be credited to your account.
