Introduction
In this article I will be writing about the Tax Deduction at Source(TDS) and the rate for some of the TDS. We all aware that we need to pay the Income Tax for our income. In some cases the employer will be taking care of paying the total tax amount to the government in behalf of all the employees by deducting the tax amount from their salaries. This process is called TDS or Tax Deduction at Source. This article will explore some of the facts related to TDS. Please post your doubts in the comments section. If you like the post, subscribe to our future articles here.
What is TDS?
Taxes are deducted at the time of calculating your income. For example, your are working for a company X. Every money they will be paying you the salary of Rs.350000. If you are looking into your payslip there is a colum name IT which mention the tax amount deducted from your salary. Actully the tax amount is deducted by your company and then pays to the government. Where as if you are not working for any company or doing the professional jobs like Doctor,Charted Accountant(CA),etc. You are liable to pay the tax to the government.
Who is eligible for TDS?
Not every one can deduct the tax at source. You have to apply for the Tax Deduction Account Number(TAN). TAN or Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. It is compulsory to quote TAN in TDS/TCS return (including any e-TDS/TCS return), any TDS/TCS payment challan and TDS/TCS certificates.
How to apply for TAN?
An application for allotment of TAN is to be filed in Form 49B and submitted at any of the TIN Facilitation Centres meant for receipt of e-TDS returns. Addresses of the TIN FC are available at www.incometaxindia.gov.in or http://tin.nsdl.com. TAN is allotted by the Income Tax Department on the basis of the application submitted to TIN Facilitation Centres managed by NSDL. NSDL will intimate the TAN which will be required to be mentioned in all future correspondence relating to TDS/TCS.
In this article I have explained about the TDS and how to obtain the TAN. This is the basic knowledge on TDS and TAN.
TDS ON FIXED DEPOSIT OF BANK
Introduction
When you open a fixed deposit account in the bank, the interest paid for the deposit will be taxable income and the banker will deduct the tax at source and pay you the remaining income to your account. This process is called as Tax Deduction at Source(TDS).The intention of this article is not to avoid the TDS on Fixed Deposit income all the times. But, there is cases where the TDS is not applicable but still the banks may cut the income from the source. It can be avoided if you act wisely and submit the required forms. This article intend to explore that in detail. If you have any doubts please post it in the comments section.
TDS on Fixed Deposit
The following are the some important points on TDS on fixed deposit:
1. Interest on fixed deposit is taxable and will be deductible from the source.
2. If the total interest amount of up to Rs.10000 is not taxable.
3. If the total amount exceeds Rs.10000, 10% will be deducted as the tax.
4. Tax liability for TDS purpose is determined at branch level. So, it is advisable to split the deposits into different branches and cut the tax rate.
Top 5 Rules for Fixed Deposit Investment
In this article I will be writing about the important points to consider while opening the fixed deposit account. This post is intend to list some of the key points which you must be aware before opening the fixed deposit account.
1. Split Your Fixed Deposit
You have to split the fixed deposit to avoid the TDS(Tax deduction at Source). If the total interest is more than Rs.10000 in a branch for the specific year, then TDS must be paid. To avoid that please split the fixed deposit and invest in the different banks.
2. Plan the Tenure
It is important to plan the number of years you want to keep the deposit. Banks will charge as penalty if you are foreclosing the deposit account. Please ask the banker for penalty applicable for the foreclosing.
3. Appoint a Nominee
Always appoint a nominee for your fixed deposit to avoid the hassle free release of amount after you. If you are not appointing any nominee, they will have to bring any of the heirs proof certificate to receive the money.
4. Check the compound interest policies
This is one of the important consideration while opening a fixed deposit account. When you hear the rate of interest is 8.0% p.a., first thing you have to ask whether it is compounded quarterly, half-yearly or yearly. If the interest is compounded quarterly, then the return rate of interest will be potentially more than the actual one.
5. Learn about taxable FD investment
If you are not aware that the FD savings can be used for tax benefits, please learn about the tax savings on fixed deposit. It has limitation of Rs.100000 under section 80c. Might be useful if you are looking for the same one.
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