People take the route of FD (Fixed Deposit) to save their own savings and income tax. With the convenience of secure investment and easy access to deposited money, people think it is worthwhile to invest in FD.
The interest income from the fixed amount in FD comes under the purview of tax.
How to save tax on interest income?
The money earned under the interest is fully taxable. For this, a limit has been fixed, only then your tax interest will be charged. Keep in mind that the same portion of your total income will be within the scope of the tax, which has been fixed in the slab. At the same time, that tax exemption on every FD cannot be achieved.
How much money will be covered under TDS?
The bank assesses your earnings from interest on your FD. If your interest is more than Rs. 10,000/- it comes under TDS. That is, TDS deduction is done on interest income exceeding Rs 10,000. The bank does deduct TDS on an annual basis.
For instance, if you have made a three-year FD and interest earned is more than Rs. 10,000/- per year, then TDS will be deducted every year. If you do not repay this interest income, the money will be deducted from your account.