TDS on interest on fixed deposits
This query is : Resolved
29 January 2009
suppose an individual has deposited Rs. 5 lakhs for 2years in a fixed deposit scheme in which he will get the compounded interest along with the principal amount only at the time of maturity. in this case should TDS be deducted from this individual every month on the interest accrued monthly or should TDS be deducted only at the time of payment at the time of maturity? which is the relevant rule/ act/ circular concerning this. please help.
29 January 2009
U/s 194A, Banks are required to affect TDS, if total interest for a finanical year exceeds Rs 10000
If Bank affects TDS regulary during the tenure of FD, include Interest in Income and claim TDS
If Bank does not affect TDS regulary during the tenure of FD, include Interest in Income and claim TDS at the time of maturity
This position applies for Individual. In case of Companies, Interest has to returned every year irrespective of whether Bank affects TDS regularly during the tenure of FD or not
If Bank affects TDS regulary during the tenure of FD, include Interest in Income and claim TDS
If Bank does not affect TDS regulary during the tenure of FD, include Interest in Income and claim TDS at the time of maturity
This position applies for Individual. In case of Companies, Interest has to returned every year irrespective of whether Bank affects TDS regularly during the tenure of FD or not
29 January 2009
Income on accrual basis and TDS for year wherein deducted.
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08 February 2009
Taking Bank's point of view interest will be deducted at the time of credit of such amount.
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