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Tds on fd interest

babugr (officer) (33 Points)

14 February 2012

Suppose I make an FD for 3 years, can I pay tax only after maturity and not every year on the interest earned.

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6 Replies

Mihir Doshi (B.Com, CA, CS, LLB) (2187 Points)
Replied 14 February 2012

Dear,

You can offer the Interest income on either on accrual basis year after year or on receipt basis when you get credit into your account. But its advisable to offer this income on accrual basis.

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valji (Accounts manager-MBA) (2150 Points)
Replied 14 February 2012

agreee with above but most of bank deduct TDS on yearly basis & issue TDS cerficate on quartely basis , bank is doing right thing

it is advisable on accural basis

sadashiv Rupchand Gaikwad (Proprietor) (521 Points)
Replied 14 February 2012

To obtained Accured interest certificate from Bank. If your taxable income goes within limit. To submit declaration F15G/F15H to the Bank. Produce PAN card photocopy. Bank may issue F16A TDS certificates, you wil get tax credit from ITD after proper uploading eTDS by Banks.

CA PRAVEEN SINGH (MANAGER ACCOUNTS) (2277 Points)
Replied 14 February 2012

yes,simple Rule of Tds Deduction...paid or credited (which is fall earlier)

babugr (officer) (33 Points)
Replied 14 February 2012

Dear All,

thanks for your clarification, I am pleased.

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Raj (PM) (25 Points)
Replied 11 April 2012

Dear Experts,

I have below queries regarding the Tax for FDs interest. Kindly clarify.

1) If I have a FD in the bank and if it is started from previous financial and getting matured in next finanancial year then how the tax will come for current year. For example, if I have the FD started from Feb 2011 & getting matured in Apr 2012 then I will get the interest only in Apr-2012 & in the financial year Apr 2011 to Mar 2012, I would not have got the interest. Do I need to pay tax for the interest for the financial year Apr 2011 to Mar 2012?

2) As Bank deducts the TDS automatically every year for the interest gained, can we get those details from 26AS form (from Income Tax site) and pay 2 times of that amount as a Self Calculated Tax. Because bank pays 10% of the interest as TDS & if we fall in 30% slab in our tax payment, balance 20% (Two times of TDS paid by Bank) needs to be paid. Is this the correct method to calculate and pay tax for the FDs interest (based on the TDS details obtained from 26AS form.

3) In few occassions, bank pays TDS in multiple days even though FDs are getting mattured on one particular day. That amount does not seem to be exactly matching with the interest gained.