Income Tax n Fix deposits

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Rajeev Moudgil (Querist)
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02 March 2009 Ctegory 1.
Mr R is employed with montly salary of Rs 20000.00.
He has an Fix eposit with the Bank to the tune of Rs500000.00
Will the Bank deduct TDS on this Fix depsoit?
If yes then at what rate?
Once TDS is deducted will he have to pay the Income tax on the interst he hs earned in the form of the interest?
If yes then at what rate of interest?

Cse 2

Mrs C hs retired and doesn't get pension.
She has fix depsots in the bank to the tune of Rs 30 lkh.
Will the bank deduct the TDS?
Is her intereset income txble?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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02 March 2009 In both the cases bank will deduct tax on the fixed deposit interest amount. Present tds rate is 10.30%.Interest income is taxable.

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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02 March 2009 Agreed with Warrier Sir. Bank will deduct TDS @ 10.30% whatever may be the case. But in the assessee having below taxable income from all sources, then he can give declaration to the bank in this regad and for non deduction of TDS. As per my knowledge some Form 15H or 15G is there for this purpose.

Rajeev Moudgil

Rajeev Moudgil (Querist)
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02 March 2009 To, Mr B C Warrier and Mr Maheshwari....... the query is still not resolved.
What I want to know is the outcome after the TDS.
Will the Deposit holder need to pay income tax also on the interst income(after the deduction of the TDS).
If yes then at what rate?

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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03 March 2009 Dear rajiv. the assessee has to pay income tax as per slab rates according to his/her total income for the year. TDS does not play any part in this tax calculation. TDS is just the taxes paid in advance which is to be deducted from total income. eg. TDS deducted by bank is 10000/-. But if the assessee is covered under the slab of 30% and intt. income is 100000/- then Tax payable shall be 30,000 on interest income only. Then out of Rs.30000, he will get the benefit of TDS of Rs.10,000/- and balance shall be payable by him.

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