If you are not an income tax assesses, you can avoid TDS deduction on Term Deposits.
How is tax calculated on fixed deposits?
Fixed deposit interest that you receive is added along with other income that you have such as salary or professional income, and you’ll have to pay tax on that income at a tax rate that’s applicable to you.
TDS is deducted on interest income when it is earned, though it may not have been paid. For example, the bank will deduct TDS on interest accrued each year on a FD for 5 years. Therefore, it is advisable to pay your taxes on an annual basis instead of doing it only when the FD matures.
Avoiding TDS on fixed deposits
Banks are required to deduct tax on interest income when deposits held in all the bank branches is more than Rs.10,000 in a year. A 10% TDS is deducted if PAN details are available. It is 20% if the bank does not have your PAN details.
If the interest on your deposited amount in the bank is more than ten thousand rupees,then according to Income tax rules, bank will deduct TDS on the interest earned by you and if your income is not taxable, and you want that the bank should not deduct TDS, then you have to file form 15G or Form 15H.
With SBI you do not need to go to the bank for that, it can be done online with internet banking facility.
Steps for Submitting Form 15G or 15H on OnlineSBi.com
Step 1. Login to OnlineSBI.com
Step 2. Go to eService in the tab.
Step 3. Then from Left Side Navigation, Scroll and Select Submit 15G/15H Option.
Step 4. You will come across two tabs. One is Form 15G and the other is Form 15H.
If your age is less than 60 years then you have to File Form 15G and if your age is more than 60 years then you have to file Form 15H.
Step 5. You can select tab as per your need.
We are showing you how to Submit Form 15G, which is already selected.
The process of filing form 15H is same.
Step 6. After confirming your select, make sure to Read the point that will come up below before proceeding.
Then Select the CIF(Customer Information Number) number and click Submit.
Step 8. Then Select you Branch Code and Select Submit
Step 9. Now you will come across a Form in which You have to fill Part 1 here and some information is already pre-filled and is already given. If there’s some information not given, you are requested to Fill up the remaining information.
Step 10. On the form you will come across an option ” whether assessed to tax” means do you file Income Tax.
If you file ITR then select Yes, otherwise select no.
Step 11. We are selecting yes as we usually file Income Tax Return every year.
As you select Yes, an option will get activated.
Step 12. Select the latest Assessment Year.
Step 13. Type the estimated total income of the year for which you are giving this declaration.
Do note that it must contain the above income also.
Step 14. Enter the total number of Form 15G filled during the previous year, if any other than this form.
Step 15. Then Enter the aggregate amount of income for the total number of form 15G filled, other than this form.
You can check the details of income for which the declaration is filed, by clicking the plus sign.
You can see the details like identification number, nature of income etc.
We will minimize the details.
Step 16. Read the declaration and click the checkbox to accept it.
Step 17. Click submit to continue.
Step 18. You will come across a review page having all the details you are about to submit.
Verify the details and click confirm.
Step 19. After clicking on Confirm you will receive a High-Security Password on your registered mobile number.
Type it in the box and click on Confirm.
Step 20. After you click on Confirm, a confirmation message will appear that your request is successfully generated.
Step 21. You can now download the form by clicking the Click here to download the form link.
When you click on the link below your form will be downloaded to your computer or mobile.
Thanks for reading this article, hope you found it useful, if you have any doubts or questions, you may ask us in the comments below.