Today i checked my bank account and saw that they deducted close 20% of interest on the fixed deposits and posted it to IT department. I got a form 16AS.
could some one suggest like what i can do to stop them cutting that 20% tax?
one more query: do we have to pay tax on the NSC / mutual funds after it gets matured ?
15 February 2012
Banks are supposed to deduct TDS @ 10% generally, however, in cases where PAN is not provided by the customer, these are deducting tax @ 20%. . You must contact the bank and ask them to deduct tax @ 10% only. If PAN is not given, give xerox copy of PAN card. .
15 February 2012
In case of NSC TDS is not deductible. . As capital gains arising from mutual funds are generally long term in nature, no TDS is being deducted except in the case of an NRI. .
I see that the bank has posted the details to TIN NSDL site where I could see the form 26AS generated and all the tax deductions from my employer and bank are available. I see that my pan is also listed there. So in this case do you have any idea like why they might have deducted 20% .
Other query is : Do we have to mention the income that we got from NSC/mutual fund after their maturity in our returns ? if yes, then my income will grow and i have to pay tax on this extra income ??
16 February 2012
1. 20% Deduction: Bank has done it by mistake. It may be SBI. In one of a senior citizens client , they have deducted at higher rate. You can request them to get changed the rate of TDS. 2. NSC interest can be taken yeraly on accrual basis. If you have not taken so , at the time of realisation you have to show the whole interest income in the year of receipt. 3. Long Term Capital Gains on Equity oriented Mutual Funds, and dividend from all MFs is exempt from tax.
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