Income Tax Return (ITR) filing: This much TDS you pay on income from Post office savings, PPF, Sukanya Samridhi, Kisan Vikas Patra saving account; but there's a catch
TDS is also levied on your income from national savings schemes. For your information, a 10% TDS each is deducted from your government notified saving schemes.
The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. But did you know, TDS is also levied on your income from national savings schemes. For your information, a 10% TDS each is deducted from your government notified saving schemes.
Here's the list of government notified national saving schemes.
1. Post Office Saving Account - A citizen can open the account in his own name individually or jointly with an adult person. Under this, a zero balance account for beneficiaries of MNREGA and otherGovt. Schemes.Notably, interest earned up to Rs 10,000 in a financial year qualify for deduction from Income under section 80TTA of Income Tax Act.
2. National Saving Time Deposit Account - This scheme is for short as well as long-term deposits with rate of interest compounded quarterly but paid annually. Interest is notified by the government from time to time on quarterly basis. One can open an account with minimum Rs 100 without any maximum limit.
3. National Saving Recurring Deposit Account - This scheme supports investors to form a capital to meet the future needs. One of the gem in this scheme is that, you can open an account with Rs. 10/- and any amounts in multiples of Rs. 5/- can be opened.Withdrawal to the extent 50% of the amount of existing balance is permissible after one year of the opening of account.
4. National Saving Monthly Income Account - It is an ideal scheme for retiring persons and also those who want steady flow of regular income.Amount can be deposited in multiples of Rs 100/- subject to a maximum limit of Rs 4.5 lakh in single account and Rs 9 lakh in joint account.
5. National Savings Certificate - Under this, not only initial deposit but also the accrued interest for first 4 years enjoys the benefit of section 80-C of I.T. Act. Loan facility available by pledging with the banks. Interest accrual on investment of `100/- and in proportion for other denominations, on yearly basis for income tax purpose.
6. Senior Citizen Saving Scheme - This scheme is for those who have retired either from service, to provide security in old age. An individual who has attained the age of 60 year or above on the date of opening of an account or an individual who has attained the age of 55 years or more but less than 60 years and has retired under superannuation or otherwise. The deposit in the account shall be in the multiples of 1000/- and not exceeding Rs. 15 lakh.
7. Public Provident Fund (PPF) - An individual can open the PPF account in her/his own name or on behalf of a minor. This means, you can also use this scheme to give a financial gift to your child. The PPF investment has a lock-in period of 15 years. However, you can get loans on behalf of your investment after certain years.
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8. Kisan Vikas Patra - One can make a minimum investment of Rs 1000 in KVP and further in the multiples of Rs 1000. There is no upper limit. For example, if you buy KVP for Rs 1 lakh today, You can get Rs 2 lakh by January 2028. Currently, the maturity period of KVP is 112 months (nine years and four months) as per the current rate of interest. The maturity duration changes as per the interest rates prevailing in the market.
9. Sukanya Samriddhi Yojana - An Indian citizen can open a bank fixed deposits in any financial institution, irrespective of age and gender. On the other hand, an account under SSY can only be opened for a girl before she turns 10.
According to section 194EE of IT Act, the person responsible for paying to any person any amount referred to in clause (a) of sub-section (2) of section 80CCA shall, at the time of payment thereof, deduct income-tax thereon at the rate of [ten] per cent.
Hence, a 10% TDS is deducted from the above mentioned scheme.
But here's the catch, the section also explains that, no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to the payee during the financial year is less than two thousand five hundred rupees.
However, if your gains are above Rs 2,500 in a financial year, then TDS will be deducted.