I make fixed deposit of Rs.200000 for 10years in financial year 2011-12. How much tax will i have to pay? i.e at the payment of interest when my fixed deposit credited in my a/c. or adjust every year if yes how ?
dinesh
2 Answers
hi
On earning the interest every year u can pay tax while filling the returns by declaring in the self asessment tax section.
The tax generally cut by the bank is 10 percent on the interest . Say if your investment earns an interest more than 10000 ruppes for a financial yr then 1000 rupees(10 percent) will be cut as income tax TDS(tax deduction at the source).
if you are a senior citizen or if you are inside the taxable income then u can give 15G/15H form and ask the bank not to cut teh tax.
How much tax you would need to pay would depend on your tax slab rate and income from other sources.
Say, if you don't have any other income and earn 20,000 as interest every year from this fixed deposit, then there won't be any income tax payable.
Maximum tax payable may be upto 30.6% on interest if you already fall into highest bracket.
TDS will be deducted by the Bank on accrued interest in case. You have to show interest income on accrual basis. Bank would also issue form 16A for TDS deduction and accrued interest. If there is less income tax liability you would need to ask for refund in income tax return. In case liability is more, you would need to pay income tax as self assessment tax.
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