I have FD in bank of 100000 Rs. of interst of 7.75% PA.My question is interest paid by bank is taxable or what is the amount exemption from tax in FD.
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Asked 3 years ago in Income Tax from Jamnagar, Gujarat
There is no exemption for chargeability of the Interest on Fixed Deposit and the entire amount is taxable.
However, if this is the only source of your income (or) your income from all sources of income is below taxable limits, (ie Rs. 2.50 Lakhs), you dont have to pay any tax on the same..
The interest on FD is assessable under the head: " Income from other sources" and there is no specific exemption for it. You will have tax liability if the income exceeds the threshold limit.
However,if you are investing in FD with a nationalized bank for 5 years, you will get deduction upto Rs 1.5 Lakhs invested during the year u/s 80C of the Income Tax Act. There can be no loan against FD and no pre mature withdrawal is allowed.
Interest received on FDR's with bank is taxable. If you are holding the FDR in the individual name then the same is taxable under the head income from other sources. Interest received on FDRs are not eligible for exemption.
The bank or the post office deducts tax while crediting the interest in case the interest being credited or likely to be credited exceeds Rs. 10,000/- in a year.
Therefore in your case , TDS is not applicable as amount is less than 10K
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