Tds on fd
Pranay
(Querist) 13 February 2014
This query is : Resolved
IF a senior citizen lady having FD of 70lac in bank, maturity tenure is one year, and auto renew every year.
she submitted Form 15H, but according to bank she has to pay TDS due to exceeding interest.
As per my knowledge, interest upto 250000 is tax free and most of her FD's are invested in september-oct (mid of year).
How to save tax?
Please guide.
ajay sethi
(Expert) 13 February 2014
your CA will guide you . why place entire amount in FD . you have senior citizen bonds . you can invest partly in them
R.K Nanda
(Expert) 13 February 2014
consult tax lawyer.
Guest
(Expert) 13 February 2014
@Author If you submit the Pan Number of the Client along with a Requisition Banker will not deduct TDS and you could mention in the letter your Auditors Would take care of it.
Pranay
(Querist) 13 February 2014
Thanks everyone for your inputs,
If I have to consult C.A , I will not ask question here.
Thanks
Rajendra K Goyal
(Expert) 13 February 2014
Submission of PAN is necessary with form 15 H otherwise TDS would be deducted.
Pranay
(Querist) 13 February 2014
Already submitted PAN, as per law interest upto 250000 is tax free, above that its taxable
Anirudh
(Expert) 13 February 2014
Please read Note No.4 below Form 15H, according to which the person responsible for making payment, is not to accept the declaration, if the income exceeds the maximum amount which is not chargeable to tax and deductions under Chapter VI-A.
In your case, since you have not indicated any other savings which would entitle you to deductions under Chapter-VI, your income by way of interest on the Fixed Deposit of Rs. 70 lakhs would certainly be exceeding the maximum limit which is not liable to tax. Therefore, the Bank Officer is right in saying that he would be effecting TDS.
However, you can save maximum Rs. 1,00,000/- under Chapter VI-A - Rs. 1 lakhs maximum in Public Provident Fund.
Even after adjusting the above savings, the income by way of interest on FD on Rs. 70 lakhs would exceed the maximum amount which is not liable to tax.
While we at LCI can give a broader picture, we are not clear whether there are any other avenues for making savings or to claim deductions. That is possible only after going through other financial positions of the senior citizen in question. That is why experts here advised you to get in touch with a C.A. who would be in a better position to go through the financial position, incomes, available exemptions etc., and to give a correct view in the matter whether or not there is any scope to avoid/reduce tax liability.
Rajendra K Goyal
(Expert) 13 February 2014
It may be that you did not submitted 15H form in time. Bank has to deposit TDS in Government account every quarter and if the form 15H was not submitted in the Bank before 1st quarter Bank has to deduct the TDS.
Now file the return and claim the refund.
Pranay
(Querist) 13 February 2014
@Anirudh ,thanks for valuable inputs and guidance.
Rajendra K Goyal
(Expert) 13 February 2014
Moreover the yearly interest on 70 lacs of Bank fixed deposit would be higher (Roughly 4,90,000 @ 7%) than the exemption limit allowed for senior citizens.
