15 October 2013
I HAVE DEPOSITED Rs 10 LACS IN FIXED DEPOSIT THIS FUND I GOT FROM RETIREMENT BENEFIT EVERY YEAR/ DATE OF MATURITY TDS DEDUCTED FROM THE AMOUNT . PL TELL ME ANY INVESTMENT SCHEME WHERE TDS IS NOT PAYABLE
15 October 2013
Submit the Forms 15G or 15H right away to avoid the tax deducted at source (TDS) on your investments, if your income is below the exemption limit.
Before you rush to submit the Form 15G or 15H, make sure that you are eligible. An individual or HUF must satisfy two conditions. First, the estimated taxable income for the financial year should be less than the basic exemption limit. This is Rs 2 lakh for individuals below 60 years and HUFs, Rs 2.5 lakh for senior citizens, and Rs 5 lakh for very senior citizens above 80 years.
15 October 2013
Here are four easy ways you can follow to save TDS on FDs:
1. By submitting Form 15G/15H
If an investor submits Form 15G stating that he has no taxable income, the bank would not deduct any TDS on the interest earned. For senior citizens, the requisite form to avoid TDS is 15H.
2. Distributing FD investment
Another way to avoid TDS is by splitting the deposit into separate banks in such a way that interest earned from any of the FDs does not exceed the Rs. 10,000 limit.
3. Timing the FD
You can also save TDS by timing your FD in such a way that interest for any of the financial years does not exceed Rs. 10,000.
For example, a 12-month fixed deposit of Rs. 1 lakh at 10.5 per cent could be started in September as financial year closes on 31st March. This way, the interest would split in two financial years, and hence TDS will be avoided.
4. Splitting the FD
An individual can start one fixed deposit under his/her personal bank account and another one under an HUF account, and, so, both will be treated as separate. So an investor with an HUF identity can split the corpus under such two heads.
Fixed deposit is an all-time favorite financial investment instrument. It provides a handsome return as well as liquidity at the time of need to an investor. Looking at the volatility, high associated risk and less assured return by other financial instruments currently, the attractiveness of fixed deposits is set to grow in the future.
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