A fixed deposit is a way where you can invest your certain amount and get handsome returns. FD provides attractive interest rates So people are more attracted to it. There are multiple types of Fixed Deposits (FDs) available in the market like Regular FD, Tax saving FD, Special FD, Recurring Deposit Scheme, Floating FD you can select as per your needs.
Tax deduction on FD interest
The interest earned from the Fixed Deposit (FD) is taxable. If the interest earned under the FD cross the 10,000 in a financial year it would be eligible for the tax deduction source TDS at 10 percent and 3 percent education cess total 10.3 percent.
Way to save TDS on Fixed Deposit
By Submitting Form 15G/15H
IF an invester submits 15G form says that he/she has no taxable account. The bank does not deduct any kind of TDS on the earned interest amount.
Distributing FD investment
This method is more preferred by the investors that you split your FD in the separate bank you have to see that the interest earned from the FD does not cross the 10,000.
Timing the FD
You can save your TDS to opt this technique the interest earned for the FD does not cross 10,000 in a financial year.
For Example: Suppose you invest 1 lakh at 10.5 percent and a financial year starts 1 April to 31- march and your month started in September and complete 31 march. This way the interest split into 2 financial years.
These are the Technique to opt this you can avoid the TDS deduction.
Related Read: Which investment is more beneficial between Fixed Deposit (FD) or Recurring Deposit (RD)?
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