Topic: Is fixed deposits interest taxable?

pls tell

This message was edited 2 times. Last update was at 10/07/2008 09:37:53

Yes, interest earned on fds is taxable, after Rs. 10,000 of interest accrued per annum. Tax is deducted at source, from the interest on fixed deposits, as per the income tax act 1961
TDS rates, after the Rs. 10,000 exemption are: individuals – 10% plus cess on top of this
However, if your income falls below the taxable limits, you may submit form 15H to request exemption
TDS liability is determined at branch level. It takes into account interest on aggregate amount of deposits in a particular branch
To gain advantage, you might want to consider opening different fds at different branches or different banks additionally, 5 year Fixed Deposits in a bank is eligible for a deduction under section 80c up to Rs 1 Lakh. however, the interest on this is not tax deductible.
Compare fixed deposit rates in India.

This message was edited 1 time. Last update was at 16/12/2009 09:03:03

Interest earned on fixed deposit is taxable.

Yes FDs interest is taxable. If any investor is investing into a 10% FD, his real rate of return post inflation and post TDS will be really minuscule. Hence, think twice befor investing in a FD. Other FDs are more used for parking temporary cash before investing them for long term. Moreover, in the current scenario, when all macro economic factors are pointing towards rate hike, it is not wise to invest in long term dated security, instead it will be more suitable to invest for small intervals and see the movement of interest rate.

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