How to save tax? What you must do and get from a 5 Year Tax Saving Fixed Deposit
As we all know that individuals earning more than Rs 2.5 lakh are required to file income tax return each year. Financial year commences from 1st April and ends on 31st March, therefore, the financial year 2018 – 19 would end on 31st March 2019. Your income would be assessed for the period from 1st April 2018 to 31st March 2019. With income tax return filing season looming, here is a big option that you can explore to save your hard earned money and earn a good interest on it instead of paying it to the taxman. However, you should know that beyond a certain limit, you will have to pay TDS. The option is 5 Year Tax Saving Fixed Deposit.
For opening Senior citizen 5 Year Tax Saving Fixed Deposit account, customers need to provide proof of age establishing that he/she is a Senior Citizen. They should visit the nearest bank branch and fill the fixed deposit booking account opening form to open a 5 Year Tax Saving Fixed Deposit. They can also open a joint account with a non-senior citizen for 5 Year Tax Saving Fixed Deposit. Image source: PTI
Any change or enhancement in your deposit portfolio earns a cumulative interest along with that of the earlier portfolio, more than Rs 10,000. In such a situation, you will be liable for TDS on their current portfolio. If interest on the current portfolio is not sufficient to cover TDS, it will be recovered from the principal. Image source: Reuters
About Tax Deduction at Source(TDS), common question is asked when are they liable for TDS. You only become liable for TDS if aggregate interest that you’re likely to earn for all your deposits is more than Rs 10,000 in a financial year. It will be deducted when interest payable or reinvested on RD and FD per customer across all branches, exceed Rs 10,000 in a financial year. Image source: Reuters