Fixed Deposit(FD) is an investment product which allows you to invest a lump of money for a fixed time period and at a fixed rate of interest. It is quite a popular form of investing in India.
When you open a fixed deposit with bank then you are lending money to the bank and it pays you interest. Applicable interest rates will be given as on the date of receipt of the funds by the bank and is fixed for the specified duration. And interest that is earned on fixed deposits is taxable in the hands of the depositor. Tax or TDS is deducted by the bank, after a threshold. Fixed Deposits and Tax discusses it in detail.
Overview of Fixed Deposits gives an overview of Fixed Deposits,
Fixed Deposit and Interest Rates discusses the interest rates and FDs.
122 responses to “Fixed Deposit Calculator”
i have a open fd on07/12/2018 & maturity dt is 7/12/20 of rs,2,33,186 on int 7.1% for 2 year the what is the interest for year ending 17-18 , 18-19 & 19-20
For the investment amount of 2,33,186 Interest in various Financial year is as follows.
Note: FY 2017-18 ends on 31 Mar 2018.
2018-2019 5236.20
2019-2020 17420.70
2020-2021 12590.77
TOTAL INTEREST 35248.00
For more information on FY and AY please go through our article http://bemoneyaware.com/financial-year-assessment-year-fiscal-difference/
Sir,
2 years ago I was invested 20000 in sbi fd for 10 years but after 2years completion i closed my fd premature then I found 16900 rs credited in my account how is it possible I can not understand.
Wow..good to know someone asking for why he has got extra money
You would get interest on FD for 2 years.
Would that be interest?
Check your Form 26AS too. It would show how much interest you got, if TDS was deducted/not
Need more details on how much money you got back?
If pancard is mandatory for withdrawing 30k rupees from postoffice fixed deposit after completing the scheduled time?
sir, i have an fd account in canara bank for 555 days at 7.1% interest, but i want to withdraw fd money before maturity period, my question is what will be the panalty amount, exact amount????
How many days have passed since you opened your FD?
From Canara bank website
A penalty of 1.00% will be levied for premature closure/part withdrawal/ premature extension of Domestic /NRO term deposits of less than Rs.2 Crore that are placed / renewed on or after 12.03.2019.
No penalty will be levied for premature closure/part withdrawal/premature extension of Domestic /NRO term deposits of Rs.2 Crore& above that are placed / renewed on or after 12.03.2019.
No interest will be payable on term deposits prematurely closed/prematurely extended before completion of 7th day
Had FD with quarterly interest compounding for 3 years with a nationalized bank which matured. They have deducted TDS on annual basis. Maturity amount indicated in the FD less TDS on interest is what i should have received upon maturity. However they paid less than that. When enquired with them, they told that since TDS was deducted, the amount on which interest became payable got reduced each year due to TDS effect.
My question is whether TDS should be reduced or not while making the quarterly interest compounding calculations.
Effectively i have received less gross interest (before TDS) than what was indicated in the FD receipt.
Whether RBI permits the same / any standard policy across all banks or each bank can decide the way they want to calculate the interest.
Hello,
I want to invest 5 lakh for 10 years in my parents name and they are 58 now. Which bank is good and reliable?
sbi or post office or lic ??
Will my parents get senior citizen % once they enter 60.
What will be the monthly interest they get if we go with sbi ?
Please guide me, i want them to get good interest for their living
Regards,
Manjunath
Hello,
I want to invest 5 lakh for 10 years . Which bank is good and reliable?
sbi or post office or lic ??
What will be the monthly interest they get if we go with sbi ?
Please guide me, i want get good interest .
Regards,
Labh
Reply
I am withdraw 300000 rupees loan from bank.it intrest 12% . 9000 rupees paid monthly . How many years will take it’s end?.
Reply plz
Time to repay the loan would be around 3.5 years assuming monthly reducing balance interest rate
You can check the calculator here
https://www.bankbazaar.com/finance-tools/loan-repayment-tenure-calculator.html?hasFlash=true&
It will take 3 years 2 months approx to clear your Loan Sir..
For any Financial details you can message me on my WhatsApp number 8296006549
Sir 5000000 fd sbi account iska intrest kya hoga 1 year ke liye …Aur apne ko income tax kitna lagega kripya jankari de dhanywad
Any formula to calculate the value of 18000 rs deposited once a year in a mutual fund @ approx. 10% annual return at end of 30 yrs
am small salaried person, if am put 3000 per moth for next 3 years as FD. how much intrest i got? as compound. what is the maturity amount?
If you are putting it monthly it would be a Recurring deposit and not Fixed Deposit.
At current 6% interest rate you would get 118536 after 3 years.
Our article Overview of Recurring deposits covers it in detail.
If i deposit amount Rs 400000 for FD at interest 7% for only 3 month only and interest will be Rs 7000 for 3 month at maturity. it will be taxable. Please inform me. It is very important for me.
Sir,
If i deposit amount Rs 400000 for FD at interest 7% for only 3 month only, then interest will be Rs 7000. it will be taxable. Please inform me. It is very important for me.
400000 രൂപ 10 വർഷത്തേക്ക് ഫിക്സിഡ് ഡെപ്പോസിറ് ചെയുവാണേൽ മാസംതോറും കിട്ടുന്ന പലിശ എത്ര ?
Sir i got 25 lakh from partition,if i wish to deposit that amount for 3 months in sbi what wil be the interest i will get after 3 months….
SBI interest rates from 1 Nov 2017 are as follows:
For senior citizens rates are 0.5% more.
5.25 for 7 days to 45 days
6.25 for 46 days to 179 days
For 90 days if you invest 25 lakhs
Maturity Value Rs. 2538527.40
Interest earned Rs.38527.40
The interest 38,527.40 will be taxable as per your income slab.
I will 1lac deposit FD in sbi 10 days ago but I will not intrest I will close FD how much penalty
As per SBI website
Available subject to penalty: For retail Term Deposits up to Rs 5.00 lacs, the prepayment penalty will be ‘NIL’ provided the deposits have remained with the bank for at least 7 days.
For Term Deposits above Rs 5.00 lacs but less than Rs 1 crore, the prepayment penalty will 1% for all tenors.
This Video by SBI shows how to Close a Fixed Deposit (e-FD) Online. To see the video click here.
Sir i got 25 lakh from partition,if i wish to deposit that amount for 3 months in sbi what wil be the interest i will get after 3 months
if you open in FD in jana small finance bank it’s gives you good interest rate 8% and senior citizen specials rate is 8.50
I am a student I have 10000rs if It deposit in fixed account for one year what amount I receive from bank with interest
With current rates being around 7.5% using our fixed deposit calculator
Maturity Value:10771.36
Interest :771.36
I want to open a tax saving FD with HDFC for 5 years for amount 100000.
How much tax will I save for each year until it reaches 5 years?
If TDS is deducted for this amount? How much?
If TDS is deducted anyway, then why they call tax saving FD?
Hi frnd ur tax saving only one year not five year.u got 10000 saving tax amount for 1 year
Hi Friends, I have an question for you.
I would like to ask can we earn interest on fixed deposits that way.
I want to ask if i do a fixed deposit of 1 lakh for 1 month maturity period with an interest rate of 4% and after 1 month(after end of maturity period) i suppose i’ll get 4% interest on 1 lakh which is 4,000 Rupees.
I want to ask that can i do this every month for 12 months(1 year) because if i do this for 12 months then I will earn 48% interest(4% x 12 months = 48% ) in a year rather than 8-9% for 1 year fixed deposit.
I want to know can we earn interest on fixed deposits that way.
and if the answer is no then why not.
No, because 4% interest you have applied for is per annum not per month, that means if you open an FD for one month you’ll get 4000/12=333 and not 4000.
And if you do that for 12 months you’ll get 333*12=4000 that means just 4% interest on 1 lakh, which is more than 6-7% if you deposit an fd for 1 year straight.
Banks are not fools brother
400000 രൂപ 10 വർഷത്തേക്ക് ഫിക്സിഡ് ഡെപ്പോസിറ് ചെയുവാണേൽ മാസംതോറും കിട്ടുന്ന പലിശ എത്ര ?
Hi Friends, I have an question for you.
I would like to ask can we earn interest on fixed deposits that way.
I want to ask if i do a fixed deposit of 1 lakh for 1 month maturity period with an interest rate of 4% and after 1 month(after end of maturity period) i suppose i’ll get 4% interest on 1 lakh which is 4,000 Rupees.
I want to ask that can i do this every month for 12 months(1 year) because if i do this for 12 months then I will earn 48% interest(4% x 12 months = 48% ) in a year rather than 8-9% for 1 year fixed deposit.
I want to know can we earn interest on fixed deposits that way.
and if the answer is no then why not.
pls someone reply…
I am retired employee I won’t deposit rs 1500000 for 5 year fixed and I am already deposit at 500000 at bank same pan I am eligible for senior citizens scheme please
Yes you can deposit in the same bank
There is a online tool for fd related calculations: http://moneycal.in/fixed-deposit-calculator
Hello if i keep today 3 lakh 36 thousand today as savings in SBI. What will be the income tax for it ?
you can claim for deduction of interest u/s 80D (Maximum limit 10000)
Hi
I have 5 years tax saving FD in SBI of value 60000. It will be matured in Feb 2017; total interest till date is 33000 so maturity amount will be close to 94000. I have not submitted form 15H/15G so will TDS be applicable? If I divide total interest 33000/5 then it comes less than 10K yearly.Pl advise.
Thanks in advance.
Tejas
TDS will be deducted when interest payable or reinvested on RD and FD per customer across all branches, exceed Rs.10000 in a financial year
I am a student, and i have RS 50000 & i want to fixed it for 3 ,so please suggest me where should i fix it.
As you are student I assume your total income is less than 2.5 lakh, basic exemption limit.
You want to invest for 3 years.
You can go for Fixed Deposits which have interest rate in around 7.5% your investment of 50,000 will grow to Rs. 62485.82 Interest earned Rs.12485.82
sir i am working on jana small finance bank our bank FD rate is 8% for individual and 8.5% to senior citizen please mail me if you interested bisht647@gmail.com
Hi, my dad has a fixed deposit of 4 lakhs in the sbi bank. We need to break the fd now. The fd was for 1 year effective June. So if we break it Wat is the amount we would get in hand?
From SBI website the premature withdrawal rules are given below.
You should not have any penalty.
As you have term deposits for 46 days to 179 days you would get interest rate of 5.75%
Premature penalty for Retail Term Deposits up to Rs 5.00 lacs will be ‘NIL’ provided the deposits have remained with the bank for at least 7 days.
For term deposit above Rs 5.00 lacs but less than Rs 1 crore, the prepayment penalty will be 1% for all tenors.
There is no discretion for reduction/waiver of penalty for premature withdrawal of term deposits.
No premature penalty will be levied on staff and SBI pensioners Deposits.
[…] Best bank fd interest rates in india The interest you need to pay depends on Tax slab. Site: http://bemoneyaware.com/calculators-quiz/fixed-deposit-calculator/ […]
sir i want to invest 7 lac in fd in sbi, i am a student and this money i got as a gift, so i want to know whether i have to fill any form for the tax deducted on income from interest or bank will credit the interest after deducting the tax.or there will be any problem if i invest entire amount in one fd or its better to invest in multiple fd please reply asap and thank u
Bharat, Best of luck for studies.
Interest earned would be income from Fixed Deposit.
Interest earned from FD would come under income from other sources and is taxed at 10%,20% or 30% as per income slab,
If interest on FD in a financial year(FY 2016-17 is 1 Apr 2016-31 Mar 2017) is more than 10,000 then TDS would be deducted.
If your income is just interest from FD and total income in a financial year is less than 2.5 lakh then you need not pay income tax.
If interest in a financial year is more than 10,000 and you don’t want TDS to be deducted then you need to submit form 15G. Our article How to Fill Form 15G? How to Fill Form 15H? explains how to fill form in detail.
I have fixed deposits around 10 lakhs and in post office around 4 lakhs and my annual income per annum is around 2.5 lakhs should i have to file income tax return.
Hello, if i had had open fd of rupees 15000 for 1 year @7.25 rate
And chose auto renewal after maturity,
BUT I HAVE doubt that does i will get same interests i.e 7.25 after leaving my fd 3 year though it is already mature
Hi
Please examine a CALCULATOR which returns the values of interest TDS PROJECTION FOR FD CUMULATIVE.
I hope this will prove as as helpful tool to arrive interest values at the end of each financial year.
The link:
Here is the link to the website: http://www.allbankingsolutions.com/Banking-Tutor/FD_Cumulative_Interest_TDS_Projection.html
Your feed back is welcome.
Vrshenoi
Thanks for sharing. We shall play with it and get back to you.
Do I need to file income tax returns if my interest from FD is around RS 200,000 and I don’t earn any other income.
I WAS DEPOSITED 2,00,000 FOR ONE YEAR WITH A INTEREST OF 8 % ON 22/05/2015 BUT ON 31/03/2016 DEDUCTED 1400 AS TAX WHY ? AFTER THAT UPTO 22/05/2016 G-15 FILL UP NECESSARY OR NOT TO ANY DEDUCTION AT THE TIME OF MATURITY
Sir,
Your FD interest for different Financial Years is as follows.
2015-2016 14148.09
2016-2017 2366.91
As Interest in FY 2015-16 is more than 10,000 10% of it was deducted which is 1400.
In FY 2016-17 interest would be only 2366.91 so no TDS will be deducted.
Please show TDS deducted while filing your income tax return
I want to know more about fd calculation
Hi, I want to know the tax rebate I would get on a tax saving FD of 100,000/-? Thanks
Tax saving Deposit Schemes are special category of fixed deposits where the investor gets the benefit of a tax break when they invest a sum of money in the deposit.
Let’s say Mr Malhotra invests Rs 1,00,000 in tax saving deposit scheme at the rate of 8% p.a. for five years.
f Mr Malhotra invests 1 lakh in Tax deposit scheme the benefits (including Education Cess) he gets is based on his income slab.
If he is in 30% tax slab i.e his income is above 10 lakh rupees, He will get a benefit of Rs 30,900 at 30.90% . His effective investment is 69,100 (1 lakh – 30,900)
If he is in 20% tax slab i.e his income is between 5 lakh- 10 lakh , he will get benefit is Rs 20,600 at 20.60%. His effective investment is 79,400 (1 lakh – 20,600)
If he is in 10% tax slab i.e his income is between 2 lakh- 5 lakh , he will get benefit is Rs 10,300 at 20.30%. His effective investment is 89,700 (1 lakh – 10,300)
Please remember Interest is taxable.
Tax is deducted at source (TDS), from the interest on Tax-Saver Fixed Deposit will be deducted according to Income Tax Regulations prevalent from time to time
if i need 50,000 Rs per month..what is my FD amount should be ..of i put for 10 years
Hello Sir,
I want to do FD at the name of my mothers of amount rs 10 Lacs. She comes under senior citizen and also gets Rs. 22000/month as pension. I want to do FD for 5 years. Also she gets some interest amount from her saving account of the same bank.
Can you please tell me how much TDS will be applied at interest per year.
Hello,
I want to pay the remaining 10% tax on the interest earned by fd. Let us assume that it’s 5000 but I have to get back 4000 as it was the additional amount deducted as tds. So do I need to pay only 1000 rs as self assessment tax or I have to pay full amount and get the refund?
Lets say you make a FD of 1 lakh rupee for 2 years at 9.75% interest on Ist Apr 2014 Interest for financial years are given below
2014-2015 10112.06
2015-2016 11159.20
As interest in each year is more than 10,000 Bank will deduct TDS at 10%. But interest of FD is payable as per your income tax slab. If you earn between 2.5 lakh to 5 lakh Tax is 10% , between 5 lakh to 10 lakh it’s 20% and above 10 lakh it’s 30%.
You can claim for refund only if your total income is below exemption limit which is 2.5 lakh for FY 2014-15 or AY 2015-16. If you have to claim refund then you don’t need to pay tax
Our article Fixed Deposit , Interest , TDS, Tax,Income Tax Return, Refund in detail.
Hope it helps
Hi
I have recurring deposit for a 5 year period in the bank.
How does the tds on interest on recurring deposit work?
For example if for each financial year the interest on recurring deposit is like 9000 so the total interest after 5 years is 45000. i.e 9000 interest per financial year.
So do i need to pay a tds here as well? As the interest per financial year is less than 10000.
And if i have to pay a tds than will it be deducted on the total of Rs 45000?
Please help me on the same.
Thanks
Rahul
Sir it depends on how long has been the RD.
Remember that entire interest earned on RD is taxable as per your income slab.
How you claim in which years is different matter. So in example you mentioned interest earned of Rs 45,000 will be taxable
If you have opened RD between 1 Apr 2014 and 31 Mar 2015 than you can choose whether to show interest on RD every year or at the end of 5 years.
If you have opened RD earlier then have you been showing the TDS in earlier years. In any coming year is amount of interest on RD will be more than 10,00 then TDS will be deducted that is it will show up in your Form 26AS. So it’s better you claim TAx in the same year.
My rd is opened since 2011 and the interest per financial year has been less than 10000.
Since there was no TDS before june 2015 so no TDS is been deducted.
My question is if my rd matures this december 2015 with a total interest earned of more than 10000 than will that be applicable for TDS deduction?
Cause the interest earned per financial year wud be less than 10000. But at the time of payout the interest collectively for all the 5 financial years is more than 10000.
Is TDS still applicable?
Hello Sir,
Interest on RD is taxable as per your income slab.
So TDS will be deducted on maturity. How much whether it is on interest for current year or whole amount needs to be clarified.(we are trying to find it and will update accordingly)
But irrespective of how much TDS is deducted you need to pay tax as per the income slab. If your income is below exemption limit then you would need to ask for refund.
I have fd in beawar urban bank of 350000
interest rate 10.25%
time period 1year
I submit my pancard nd fill form 15-h or 15-G
how much money receive
my aunty buy f.d. 25 years before after her in 2002 ,i have to got theses f.d. ,s money now in 2015 after sucasion certificate from s.b.b.j. udaipur. my aunty’s f.d. details are:
bank f.d. maturity date
sbbj,udaipur 10,000 /- 24 aug. 1991
10,000/- 20 oct. 1991
5,000/- 17 dec. 1990
4,000/- 6 nov. 1990
10,615/- 28 june 1995
10,000/- 12 oct. 1993
1500/- 12 july 1995
11707/- 15 apl. 1991
7,000/- 10 nov. 1993
How much money i have got from bank after deduct the tax.
Sorry for delay in replying.
You have received the matured amount in 2015 only. Mostly the initial deposits were around Rs 10,000.If you would have received more than
Rs 10,000 , the Bank would have deducted and deposited TDS in her name. So viewing 26AS will help to determine the actual amount received and the TDS upon that.
i have FD of 200000 RS in SBI Bank, I have no other money in the same bank. also not going to deposit any money in future.
now i will get 17600 Rs interest on the above amount. how much TDS will be deducted ?
now i am outside of India and putting all my money in different bank in NRE account.
For how much time did you have the FD.
For a resident Indian, Typically in a year if Interest on FD is more than 10,000 TDS is deducted at the rate of 10%.
Bank and Fixed Deposit: NRE, FCNR No TDS
NRO 30.9% without DTAA,lower with DTAA
So is your FD related to your NRE account or not?
I am having an FDR of Rs 100000 with maturity value 110142 in may 2015, interest for FY 2014-15 is Rs 8675 & for FY 2015-16 Rs 1467.I want to confirm wheter bank will deduct TDS on maturity or not & If yes then on what amount(10% of 10142 or 10% of 142), also confirm bank deduct TDS on interest above 10000 or total interest if above 10000.
Hello,
I need to invest 75000 rs in order to save tax. Out of 75000 rs, I have already invested 25000 rs in LIC, and 20000 rs in PPF. Can you please advice where I can invest the remaining rs.30000 ?
I’m salaried, 24 year old.
Thanks
Regards,
GNK
Dear sir,
I HAVE FD ON INTEREST RATE ON MONTHLY BASIS, MY INTEREST RATE EXCEED BY 10,000 ,SO THE BANK DEDUCTED TDS THIS MONTH ,I WANT TO KNOW IT WILL BE DEDUCTED EVERY MONTH
Sachin,
TDS is done at the time of credit of interest to account if the total interest payable to the customer during the financial year is likely to exceed the limit of Rs. 10,000. Interest is applied on quarterly basis for cumulative FDs and on monthly basis of monthly interest payout FDs.
So at time of paying interest if interest exceeds Rs 10,000 TDS will be deducted. So if every month interest exceeds 10,000 TDS will be deducted
Hello sir
I have a fd for 5 years
5 years (maturity )is about to complete in another one month.however I need to withdraw . As per your article I will be penalised for the same i.e premature withdrawal .
My question is in case if I want to have partial withdrawal , is it possible?
And the rest portion can continue as fd for another period ?
Hello Ameet,
It depends on the terms and conditions of the bank. So check up with your bank,
Usually for partial withdrawals, the Bank will levy a penalty (typically of 1%), on the applicable rate.The balance amount earns the original rate of interest.
Hi
I have a question on how much penalty i will incur for an SBI FD
I have an FD in SBI for 3lacs and it matures 30/12/2014 . The FD is 1 year Term and quarterly compounded .
The bank continues the interest rate of 9% after maturity date.
Say If I want to close the FD on 30/01/2015, then what would be the penalty and what would be the money I will lose when comapred to if I had continued for next 1 year if I had continued.
Thanks in advance
Raje
When one breaks FD prematurely then one will get
1. Less Interest Rate. Interest Rate will be for the period of FD
2. May Face penalty for breaking the FD.
Interest Rate
For example If you have invested in fixed deposits on 1 July 2012 for 4 years at 9%. For whatever reason you want to break your Fixed Deposit after one year on 1 July 2013. The applicable interest rate for one year fixed deposit in the bank at the time of opening of your FD was 6.5% . So you will earn 6.5% per annum for your deposits and not the original rate of 9%.
At times no interest is payable where premature withdrawal of deposits takes place before completion of the minimum period prescribed. For example
State Bank of India states For Single term deposit of less than Rs 15 lacs, in case of premature withdrawals, the interest rate shall be 0.50% below the rate applicable for the period the deposit remained with the bank or 0.50% below the contracted rate whichever is lower for all tenors provided these have remained with the bank for at least 7 days.
Penalty:
Banks usually levy a penalty in the form of a 0.5-1% lower interest on customers looking to close their Fixed Deposit. Some banks do waive off this penalty if the liquidation of the FD is due to some emergency.
For example : If you have FD of Rs 1 lakh, for 4 years, earning an 8% interest. So the total interest you will receive will be Rs 37,278.57 over 4 years. In case the FD is broken after 2 years, the interest rate applicable for 2 years was 7.25%. Considering a penalty of 1%,the actual rate applicable will be 6.25% and the total interest received for 2 years will be Rs 13,205.38 and not 19,483.11 (9% for 2 years) or 15,453.95 (7.25% for 2 years).
As per Reserve Bank of India(RBI) instructions are the bank have the freedom to determine its own penal interest rate for premature withdrawal of term deposits.
More is discussed in detailed in our article Premature withdrawal or Breaking of Fixed Deposit
Hope it helped
Kirti, thanks for the time taken out to answer all individual queries separately and meaningfully.
Have a query on tax saving FDs (5 years lockin). Is there any calculator online that can help me with understanding the returns?
Also, the tax benefit I get from 5 year FDs is it for the first year only or for every single year ? For eg. assuming I am in the 20 % bracket, I put 1L into a 5 yr FD and then save 20K for the first year in tax. Will I save the same amount in the second year too for the same FD or not?
Santosh I apologise for replying later as I was on vacation.
I have written an article Tax Saving Fixed Deposits which should answer most of your questions.
In summary
you get tax benefit only in the year you invest
Investment is part of the Rs 100,000 exemption presently available in respect of life insurance premium, contribution to PF etc.
As this is Fixed Deposit tax saving is only for the principal amount that you invest, interest is taxable. On investment of 1 lakh one in 30% tax slab saves 30,900 , on investment of 10,000 one saves 3,090. But tax has to be paid on interest earned 5228
Hope it helps
Looking forward to any doubts that you may have
I want deposit 50000 in NSC @ post office. Pls guide me your opinion 1.whether to go for 5 years or 10 years maturity according to the current scenario.If I opt for 10 years then the int rates will fix for 10 years or it will change accordingly further Govt. announcement.
2. By investing this lump sump amount in M.F may be not correct.
Pls advice at the earliest.
Raj it would be difficult to suggest whether NSC is right for you or not or whether you should opt for 5 years or 10 years.
Reason : I don’t know why are looking at NSC, do you want money after 5 years and 10 years.
It’s like asking doctor prescribe me medicine by telling I am having cough. I hope you get the point.
Before Investing Think about Liquidity,Safety,Returns,Risk,Tax
The main objective of investing in the NSC is to avail tax deduction on deposits and guaranteed returns on investment. The five and ten year tenure is used by many to create a regular monthly income stream in retirement or investing in name of minor children timing it for their higher education .
Taxable. Amount of Tax is based on your income slab (just liked Fixed Deposit).
No tax deduction at source. (No TDS)
Interest earned every year is automatically reinvested, and such re-invested interest qualify for tax rebate under section 80C of the Income Tax Act, except for the last year.
By Mutual Fund you mean diversified equity Mutual Fund then currently market is trading at high but no one knows whether it will go higher or lower. So yes lump sump does not make sense and investing in Equity Mutual should be with aim of investing atleast for 3 years.
Do I make sense?
I would request you to see the big picture of all your investments and then plan your investments.
Forgot to answer the question on interest rate of NSC.
Every year in April, the interest rates are reset according to what the market yield for government debt is. But once invested the interest rate for NSC will be locked at the rate when the investment is started.
Our article What are National Savings Certificate (NSC) explains NSC in detail.
My wife and I have NRO fixed deposits. I need to know the amount of Tax Deducted at Source (TDS) so that my U.S. accountant can take advantage of the Double Taxation Avoidance Agreement (DTAA) when preparing our U.S. tax return. How do I determine the TDS for calendar year 2013 (1 Jan 2013 to 31 Dec 2013)? If TDS is deducted on March 31 on interest accrued and Form 16A is issued in April, that comes too late. I need the figures now. Should I write to the bank and ask them for the data? Should my U.S. tax preparer assume 30% was the TDS? Please advise.
Interest earned on the Non Resident Ordinary Account (NRO) is taxable and will be subject to a TDS of 30 per cent and education cess of 3% making it to 30.9%. There is no basic exemption limit.
Under the current DTAA provisions, you can enjoy concessional rate of Tax Deducted at Source (TDS). As per the recent amendment to the Indian Income Tax Act as announced in Union Budget 2012, NRIs who wish to avail DTAA benefit have to mandatorily provide Tax Residency Certificate (TRC) to the deductor (Bank). This is applicable for all NR customers who wish to avail DTAA benefit with effect from 1st April 2012.
Documentation required to avail DTAA benefit:
If you submitted the required documents that TDS would have been deducted at the rate of 15% (for USA )
So did you submit the documents to the bank?
There is no harm is asking the bank.
As I remember, we submitted our PAN card numbers to the bank but did not submit the other forms. I don’t care if the bank deducts 30.9% or 15% TDS. I just need to know the amount of TDS that I can claim on the U.S. tax return, Form 1116 – “Foreign Tax Credit” (Part II of Form 1116, “Taxes withheld at source on interest” -paid or accrued).
It seems that TDS is deducted from a NRO fixed-deposit account on March 31 (at least for interest accrued but not paid) and then Form 16A becomes available in the month of April. If that’s the number I need, it’s cutting it very close to the April 15 deadline for filing U.S. taxes. Can an accountant compute or estimate this amount for me, or could the bank provide the data in advance?
Or, if a bank issues 1099 Forms, Box 6 will state “foreign tax debited in 2013” for NRO fixed deposits. Is that figure to be used as well on Form 1116?
My wife and I are both registered with incometaxindiaefiling.gov.in. The online Form 26AS for Assessment Year 2013-14 does give a TDS for one bank on her online account, and it lists another TDS value for a second bank on my online account. Are those two TDS figures the ones I need to report on our U.S. return, Form 1116?
I appreciate any help you can provide. It’s very confusing, and my U.S. tax accountant doesn’t know any of the answers.
We don’t have information about Form 1116 so can’t be of help there.
Form 26AS has information on tax deducted and is organized into various parts such as Part A, Part A1 etc
PART A shows Details of Tax Deducted at Source (All amount values are in INR)
This section will show the TDS deducted from your salary / pension income and also TDS deducted by banks on your interest income. TDS deducted by each source is shown as a separate table.
From your assessment year of 2013-14 you can check out what is the TDS deducted 15% or 30%.
You can also email to the bank to get the idea.
For details on what to verify in Form 26AS you can go through our article What to Verify in Form 26AS? which has images etc.
Our article NRI : Fixed Deposits, DTAA also throws light on fixed deposits for NRI. It might be helpful to you.
It is confusing yes..because you haven’t thought about it earlier. Once you fix all the pieces it will become clear.
Keep on questioning, looking for answers you shall get it. We shall try to help you in whatever way we can.
Hi,
I am going to do FD of Rs 75000/- for 5 years for tax saving.And i saw SBM giving 9% interest for 5 years.
Please let me know whether i need to pay any tax on the interest earn and if any then how much? And how to calculate the TDS?
Whether the TDS will be calculated yearly or after end of the maturity?
Please help…
Regards,
Joy
Hi Joy
Yes you need to pay Tax on tax saving Fixed deposit of 5 years. If you check the webpage of State Bank of Mysore Tax saver scheme it says
TDS Interest on these deposits shall be liable to tax under the Act as per procedures already laid down. The tax on such interest will be deducted in accordance with provisions of Sec 194A or Sec 195 of the act.
Interest is noted as per the financial year. How much you would earn in 5 years 77784.05
TDS is currently deducted at 10% if interest in a year exceeds Rs 10,000
If TDS exceeds Rs 10,000 in an year, it would show up in Form 26AS so you should account it and pay extra tax based on your tax slab in that year.
More details in our article on Tax saving deposits
If something is not clear please don’t hesitate to ask!
Thanks Kirti for your response.
As i know that i need to pay 10% tax if interest in a year exceeds Rs 10,000.
When i calculate interest(compound quarterly) on 75000, i saw that in each of the first 4 years the interest is not exceeding 10000 at 9% interest/yr. And might be last year it is exceeding 10000.
So i need to pay TDS only for the last year or how this will be calcualted?
One more doubt,
when the interest exceeds more than 10000, TDS will be taken. And in that case if i filled INCOME FROM OTHER SOURCE, then again tax will be taken.
For ex:
i earned interest 20000, so TDS will be taken 2000.After that if i put that 20000 in INCOME FROM OTHER SOURCE and my tax come under 10% slab, then again tax will be deducted on that amount?
Joy yes you have got it right. Going forward a time will come when interest on 75,000 Rs tax saving bond will be more than 10,000 Rs and TDS will be deducted and you would have to show it in ITR. So there are two options
1. Start showing it from 1st year irrespective of whether you get it or not
2. Split the amount(75,000) among different branches/bank so that TDS amount is any financial year is more than 10,000 Rs.
My question is : Why do you want to invest in Tax saving fixed deposits?
Hi Kirti,
Thanks for the quick reply.
I dont know whether any other good option is there for saving tax but at the same time i am expecting a good guaranteed returns.
Pleas suggest me if you have any other opinion where i can invest my money.
Regards,
Joy
Joy we started this blog to increase awareness about money related terms. Hence it’s a pleasure to answer your queries.
Without knowing your financial picture it is difficult to suggest something. It’s like calling doctor and saying doctor I am not feeling well. Doctor needs more information to diagnose.
Our article Choosing Tax Saving options : 80C and Others might be helpful to you.
If you have some doubts or queries please ask.
For your second question:
TDS is cut at 10% Tax on interest from fixed deposit is as per your income slab.
So if you have earned interest of Rs 20,000 on FD in a year, bank will deduct 2000 and pay you 18,000 (by pay i mean it is the amount it has to pay that year and if you have gone for cumlative option you will get it after the tenure of FD).
If you are in any income slab more than 10% you will have to pay more tax.
If you are not even in 10% income slab you can ask for refund.
Our article Fixed Deposit , Interest , TDS, Tax,Income Tax Return, Refund discusses it in detail.
That means, if TDS has already been taken by the bank and if i show that income in the INCOME FROM OTHER SOURCE, then again tax wont be deducted(if my tax comes under 10% slab).
Only if the slab goes more than 10% then only some tax will be deducted from that income. Am i right?
Regards,
Joy
TDS is deducted at rate of 10% irrespective of your income slab if interest on FD in a financial year is more than 10,000 Rs in a branch of the bank. if TDS is deducted it should show up in Form 26AS and Income tax dept can verify that.
If your income is in 10% slab and you would not have to pay any more tax on interest from FD.
If your income is in 20% or 30% slab you would have to pay remaining tax.
Say interest is 12,000 in a financial year. TDS deducted would be 1200 (10%)
if you are in 10% slab then you need not pay any more tax
If you are in 20% slab then your total tax due is 20% of 12,000 i.e 2400. 1200 is already deducted so you need to pay remaining rs 1200
If you are in 20% slab then your total tax due is 30% of 12,000 i.e 3600. 1200 is already deducted so you need to pay remaining rs 2400
Can 15G/15H be submitted to company FD’s to claim tax exemption just like for Bank FD’s? I am plannig to invest in Mahindra Finance FD for 3 years which gives 10.25% interest. Trying to understand which is a better option 1)Banks FD at 9% without TDS or 2) Company FD’s at 10.25% with TDS. Thanks
Sreedhar Form 15G/15H can be submitted to claim company FD’s tax exmeption just like Bank FD.Forms 15G or Form 15H should be submitted timely to avoid the tax deducted at source (TDS) on your deposits if your income is below the exemption limit.
Form 15G is meant for Resident Individuals who are below 65 years of age.
15H is meant for Senior Citizens who are of 65 years of age or more during the financial year
Form 15G/15H is a self declaration by the depositor which can be obtained from the company. It is a self declaration which needs no attestation.
For company deposits TDS is deducted if the interest on fixed deposit exceeds Rs.5000/- in a financial year
Let’s clear one thing.
Income from Fixed Deposit (i.e interest) is treated as income from other sources and is taxable as per the person’s income slab.
TDS is just a way of taking some tax before by the govt and is charged at 10%
If your income is below exemption limit then if TDS is cut you can claim it
If you are in 10% bracket you need not pay extra tax
If you are in 20%/30% bracket you need pay extra tax
It is explained in detail in our article Fixed Deposit , Interest , TDS, Tax,Income Tax Return, Refund
Hello sir,
First I like this blog, It is very useful for banking solutions.
I have query about the deduction of interest for FDs which I want to get it to my account before maturity date.
If I have FD of 65,000 for 1 year with 9.15% interest issued on 12 nov 2012, and I want money in my account on 28 june 2012
So how much amount I will get with howmuch interest..?(please show me calculation)
I dont know the rules for this matter. I just heard that bank will deduct a small bit of interest before paying to my account.
Is that same for all banks in India…?
Pritish thanks for the question. I think it deserves an article, So I have started writing one. Please be patient, it would be available in a day or 2.
@kirti
Idea is good and welcome; and may prove useful particularly to those who have no clue or mind, or will or wish, to try and reasonably understand what are the deficiencies in the TDS regime. AS one is expected to be aware, those have come to surface lately, after the DEL HC issued writ(s) of ‘mandamus’ (in a PIL matter). The TDS woes of enormous lassitude as eminently and lucidly brought out pin point to one thing; that is the woes complained of are mostly attributable to the lately set up so called CPC.
For guidance, one may care to look up the personal Blogs @ swamilook, by search inter alia under the 2 specific topics – “tds woes” and “section 194 IA”.
Also look up, if swo care to, the personal comments as made from time to time on the two websites of,- taxguru and itatonline.
Hello,
Is that article available on the site or not…?
If yes please share the link because I couldn’t find out on this site.
Thanking you
Yes the article is published. You can find Premature withdrawal or Breaking of Fixed Deposit.
Waiting for your feedback
Sir if I have FD of 150000 for 555 Days on 9.5% interest rate & if I issued this fd on october 2012 then Do I have to pay TDS..???
Because financial year ends on 31 march 2013 so there is interest around 7200.. so … Is there any deduction in my maturity amount…?? Basically I need idea about how they calculate interest..as end of FD or on the end of financial year, & if deduction is on the end of financial year then how they count my interest for various FD having different duration..
interest of 7200 is from october’12 to march’13 approx
Interest on FD per quarter is as follows:
1. 3656.25 153656.25
2. 3745.37 157401.62
3. 3836.66 161238.29
4. 3930.18 165168.47
5. 4025.98 169194.45
6. 4124.11 173318.56
7.125 days. 329.64 173648.21
Total: Total Interest Earn Rs 23648.21 Ending Balance Rs 173648.21
Bank deducts TDS at the rate of 10% when interest on FD in the FY is more than 10,000 and you have submitted the PAN. (20% if no PAN) but interest on FD is added as income from other sources and taxed as per your income tax slab.
As you rightly pointed out interested earned in FY 2012-13 is around 7200, 7401/ As for the FY 2012-13 interest is less than 10,000 Rs bank will not deduct any tax, so no TDS will be cut.
But for next year,FY 2013-14 the interest would be 15916.94 hence bank will deduct TDS of around 1592 and it would come up in Form 26AS
Then For FY 2014-15 the interest would be 329 so bank will not deduct any TDS.
So it’s best that you account for interest for FD every year.
Hi, I have a doubt on TDS. Is 10% the maximum tds deducted? if not what is the maximum % and for example the interest accrued for a customer is 15 lakhs for a financial year, then what will be the tds % for that customer?
please clarify!
thanks and regards,
Navin.
Hello Navin,
Having doubts is good, it means you are trying to understand something. Our article Fixed Deposits and Tax explains in detail but Basics of TDS are:
TDS is deducted on the interest paid or accrued or likely to accrue during a financial year.
Prevailing TDS rate for Individuals / Firms / Domestic Company is 10%, where Interest paid or occurred or likely to be paid for the year exceed Rs 10,000.
TDS at applicable rate OR 20% whichever is higher is deducted where PAN is not registered with Bank.
If you are eligible and wish to avail TDS exemption, submit Form 15 G / H duly mentioning thereon your PAN details, without which it would be invalid.
You can check website of the bank in which you have fixed deposit or let us know which bank and we can do needful.
So if your interest is 15 lakh in a FD bank in a financial year then Bank will deduct 10% TDS on 15 lakh i.e 1,50,000 (1.5 lakh). The interest you need to pay depends on Tax slab.
Admn
Data furnished below:
Maturity Value:159910.98
Interest :59910.98
Annual Yield :9.84%
Kindly confirm that the net receivable is Rs as under:
TDS @ 10% 5,991
Net receivable on maturity (by simple arithmetics) must equal
Rs 1,53,919
Sir
We need following information to answer your question:
What is the invested amount and time period?
By Yield did you mean Interest Rate?
What is the compounding frequency ?(usually for FD it’s quarterly)
Are you withdrawing the interest during the investing period?
Are you trying to find out how much money would you receive after TDS?
If so then what you said is correct:
Bank cuts TDS @10% if interest in a year exceeds 10,000 Rs but for company fixed deposits and NDFC TDS is cut @5% and if more than 5,000 Rs assuming you have submitted your PAN.
Assuming it’s bank for Interest of 59910.98 TDS will be 5991.
So Amount received on maturity will be = 159910.98 – 5,991
= 1,53,919
You can verify TDS cut in Form 26AS
Thanks Admn.
You have answered my limited poser already, separatey.
ONE MORE; Law requires TDS on interest, though not due and payable , as recknoed at the end of every financial year,- from date of deposit to date of maturity.As such, even if, as agreed, calculation is to be with a qly. or half yly.rest, payer has to pass an entry for interest ‘payble'(on a cumulative basis, though not due for payment)only on an annual basis (i.e. at the end of financial year. ALSO, ACCORDINGLY, PASS AN ENTRY FOR AND PAY TDS. NOT AT THE END OF EVERY QUARTER OR HALF YEAR.
WILL YOU CONFIRM YOUR UNDERSTANDING.
If TDS is deducted and it shows in Form 26AS then one should show it in the same year. But when Fixed Deposit spans multiple Financial Years Method of accounting has to be taken care.
And TDS does not mean that tax responsibility is over.
My understanding on Tax on Fixed deposit is here Please let me know if we have understood correctly.
Correctness of TDS rate of 5% you mention for , besides NDFC, coroprate FDs – needs to be rechecked!
You are right it should be 10% for NBFC. Apologies.
Our Understanding of TDS can be read at Basics of Tax Deducted at Source or TDS
[…] Fixed Deposit Calculator […]
what will be the tax amount deducted
Amount of tax deducted as TDS is 10% but interest taxable on Fixed Deposit is as per your income slab.
[…] Fixed Deposit Calculator […]
[…] Fixed Deposit Calculator […]