Master in Accounts & high court Advocate
9610 Points
Joined December 2011
The deduction of 15.7% by your bank under Section 194A seems incorrect.
Here's why: Correct TDS Rate The correct TDS rate under Section 194A for interest on deposits is: - _10%_:
For interest paid on deposits, if the amount exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). Surcharge and Cess
However, there are additional levies that might explain the 15.7% deduction: - _Surcharge_: A 10% surcharge is applicable on TDS if the deductee's income exceeds ₹50 lakhs. -
_Cess_: A 4% health and education cess is applicable on the TDS amount.
Calculation Assuming the surcharge and cess are applicable, the calculation would be: 10% (TDS) + 10% (surcharge) = 11% 11% + 4% (cess) = 15.40% ≈ 15.7%
However, this is still not justified, as the surcharge and cess should not be applicable directly on the TDS rate.
Actionable Steps Given the bank's unresponsiveness, consider:
1. _Filing a complaint_: Reach out to the bank's nodal officer or the Banking Ombudsman.
2. _Claiming refund_: File your income tax return and claim a refund for the excess TDS deducted.