05 January 2016
TDS Provisions not applicable on Saving Bank Interest. The interest earned on savings account is exempted from TDS under Section 194A of Income Tax Act i.e No TDS is deducted on interest from saving account.
No TDS is deducted by banks on interest earned in Saving Bank accounts. However, interest earned on Fixed Deposits and Recurring Deposits are subject to deduction of tax as per rules (Earlier Recurring Deposits were exempted from TDS but now from June 2015 onwards, banks are required to deduct TDS even on the interest earned on Recurring Deposits).
05 January 2016
As far as interest earned on Saving Bank accounts is concerned, income from interest earned on Saving Deposits beyond Mr 10,000/- p.a.only are taxable. Thus, in nut shell we can say that NO interest income from Fixed Deposits or Recurring Deposits is exempted from income tax. As explained above, now TDS is deductible on interest earned on Fixed Deposits / Term deposits and also on Recurring Deposits. However, in certain conditions, no TDS is deducted even on the interest earned on fixed deposits, e.g. if the total interest earned on such deposit in a financial year is upto Rs.10,000/-. However, you should be clear in your mind that even if No TDS is deducted on your interest earned on Fixed Deposit interest or Recurring Deposit, you still have to include this income in your tax return and pay tax.
05 January 2016
The interest earned on savings account is exempted from TDS under Section 194A of Income Tax Act i.e No TDS is deducted on interest from saving account. If the interest is earned on amount transferred to deposit under Auto Sweep facility then same will be subject to TDS u/s 194A if the threshold limit of Rs 10000/- is crossed.
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