People make fixed and recurring deposits for extra income. Only loss in this tax. Recently there are few changes in the income tax on deposits.. lets go through it.
We have to pay tax for income more than the limit. Interest on deposits is also an income. so interest is added to our total income for tax calculation.To reduce this tax or tax redemption we should follow some rules..
IN SAVINGS ACCOUNT..
Interest on bank savings account is 4 % annually. According to section 80 c if the interest is less than 10000 rs, tax wont be applied.Banks doesnt process this, so we have to note down this while filing returns.
In FIXED DEPOSITS..
Banks financial year is april 1 to march 31. In this time if our interest is more than 10000, bank cut 10 % as tds. In case if we havnt submit our pan card, then the tds will be 20 %. Banks pay us the remaining income.
In case if we deposit in the middle of financial year, interest will be counted only till the end of financial year. EX…. Ram deposited money in october for an interest of 19000. By the end of financial year I.e march his interest will be 9500 on which tax is not applicable.
This is also brought in for recurring deposits too.. there are lot of changes made in this in the year 2015. If our total income is less than 2,50000 annually, we are freeied from tax. In this case we have to submit form g in the starting of financial year. The people who are above 60 years should submit form h.