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Tds deduction under income tax section 194a from saving a/c

Anadi Kaistha (Sr Mgr) (30 Points)

22 July 2016

Dear Members,

TDS is deducted on interest on fixed deposits under IT section 194A. I want to understand the followings:

1. Can I give instructions to my bank to deduct TDS from saving account on interest (income) on fix deposits linked with saving account? If yes, what type of instructions shall be given under which section of income tax act or RBI guidelines?

(Reason: Deduction of TDS on interest on fixed deposit minifies compounding effect)

2. Does interest income on time deposit (fix deposit) less than three months liable for TDS under IT section 194A?

Regards,

Anadi Kaistha

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1 Replies

Dinesh Mertiya (PROFESSIONAL) (761 Points)
Replied 23 July 2016

if you have FDR with link option with saving bank account, means interest on fdr is deposited in your bank account. bank may deposit interest on fdr after deducting TDS in your saving bank account

according to income tax provisions, bank cannot deduct TDS on interest on deposits in saving bank account.

2. Does interest income on time deposit (fix deposit) less than three months liable for TDS under IT section 194A?

bank is liable to deduct TDS under section 194A, interest is credited (due) or paid on FDR (mature or renewal) more than 10,000/- , whichever is earlier