How to SAVE TDS on FD😠 (Fixed Deposit)| Important Financial Advice

 As we promised in our previous video that we will tell you

How you can save Tax and TDS on FD,

This is Rishabh Jain and you are watching Labour Law Advisor, before we proceed

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The interest earned on FD is 100% taxable means if you fall under taxable income

Bracket, which means your annual income is more than Rs 2.5 lakhs

Then you have to pay tax on it,

>> MANDEEP : Friends before proceeding in the video further

TAX VS TDS

I want to tell you the difference between Tax and TDS

Let's talk about income tax which is imposed on your annual income

For which there are many slabs, at which you can look in detail from the description

That what are the tax percentages for different income groups

Now if we talk about TDS, it means "Tax deducted at source"

Any of your income whose sum is little higher on that before getting transferred

To you, some tax is already deducted from it because the government or income tax

Department doesn't have a full belief that you will declare your whole income

Honestly, so in advance, they cut your income tax, TDS is never your

Actual income tax, it can happen that the income which is made at the year-end

Doesn't come under the taxable limit, but if for any of your income TDS is already

Deducted that year, then in that case you will get the whole TDS back,

Or it can also happen that you have earned a high income that year, but your TDS

Deducted is less than your tax liability then you have to pay the rest of the balance

In form of tax, so TDS is just tax deducted in advance whose correct

Adjustment is shown in your income tax return, if you have paid extra TDS then

You get a refund, or if you had underpaid it and your tax liability is more

Then you have to pay rest of the balance left

So from this video, you will understand that how much TDS is imposed on FD

And how can that TDS be saved, because once your TDS is deducted then you have

To wait for at least 1 year after that only you get a refund in your account

And that too will only come if you had paid TDS in excess and your tax liability

Was less, so do watch this video till the end to know how can you can save TDS on

Your FD, as once the TDS is deducted your money gets withhold until you file your

Returns, and for some time after it also, it stays withhold before getting refunded

>> RISHABH: Anyone who is paying you any amount, he pays you after deducting

The certain amount which as a tax he deposits to government, this is called TDS

WHEN AND HOW MUCH TDS IS APPLICABLE?

For banks, this limit is Rs 10K, which means the interest that they are paying to you

If its amount is more than Rs 10K then they will deduct tax from it

Whereas for NBFCs, HFCs or for Co-operates the limit set here by government is Rs 5K

This means if interest paid by them gets exceeded by Rs 5K then they will cut TDS

On it, How much TDS will they cut?

If you had submitted your PAN card then in both cases 10% TDS will be deducted

Assume that the total interest that the bank will pay you is Rs 15K, so the bank will cut

Rs 1,500 from it as TDS, likewise in NBFC if an amount of Rs 10K is made then

They will pay you Rs 9K only after deducting 10% TDS

Because its limit is Rs 5K, you have to note one thing here that if you had not

Submitted your PAN then in those case the TDS that is deducted is at a 20% rate

Means it is double, so it is important that if your interest of Rs 5K or Rs 10K

Respectively in the case of Bank & NBFC is going to cross then do submit your PAN

We will further in the video understand that how you can avoid it

From getting deducted,

How to avoid TDS?

HOW TO AVOID TDS? (FOR NON TAXABLE INCOME)

There are two ways to stop TDS that are Form 15G & Form 15H, they are filled when

You fall under the bracket for nontaxable income, here you request banks to not cut

Your TDS, and why they should not cut it?

Because if your TDS gets deducted though ultimately you will get that money back

While filing your return but for that you have to first file the return then you

You have to wait for almost 1-1.5 years until July, and after it also it takes

2-3 months to get refunded, so for a long time your money will be withheld

So it is better that if your TDS should not be cut then it must not be cut

For this, you can fill these two forms which are Form 15G & Form 15H

If you are below the age of 60 years then you have to fill 15G and if you are above it

Then you have to fill 15H, many banks have the facility to fill these forms online

If you'll submit these to the bank then the bank will not cut your TDS

How to avoid TDS if you fall under taxable bracket?

HOW TO AVOID TDS? (FOR TAXABLE INCOME)

In many cases, it will be that you fall under taxable bracket, so it is obvious that

You can't submit 15G & 15H, so then how you can avoid TDS ?

There is a very amazing trick for it, so what you have to do is that you have to

Plan your FD in such a way that in any single FD interest should not cross Rs 10K

If it is in the bank, and interest should not cross Rs 5K in single FD if it is in NBFC,

You have to also note here that in different branches of the same bank

Also in different accounts, if overall you cross Rs 10K then also

TDS will be deducted, so it is better that you do your FDs in different banks in such

A way that in every FD your interest remains below Rs 10K, so that TDS will

Not be deducted anywhere but do remember that it will be added to your income

And tax will be imposed on it, so be aware of the difference between Tax & TDS

Formalities after deduction of TDS, if your bank does the TDS deduction,

FORMALITIES AFTER TDS DEDUCTION

Then what all documents do you have to take from bank to file your return,

If the bank has deducted TDS then it will provide you Form 16A under which your

PAN amount, date of deduction, and how much amount as a tax bank has deposited for you

All these you will get in that document, this amount will also reflect in Form 26AS

While filing your annual return, if you have any problem with these two

Then you can contact your bank or income tax department

Now we will understand Tax on fixed deposit,

TAX ON FD

Tax on fixed deposit is calculated according to income from other sources

And it's tax is made by adding in the tax bracket accordingly

If your TDS is already deducted then you can claim it back as a refund

Tax for FD made for you is calculated on accrual basis means if you have done FD

For 5 years and the overall sum for it you will get after 5 years only

But the tax for it you have to pay at every year-end, for interest that you have

Earned that year, and not that you have to pay the tax onetime for the whole amount

So friends I hope that you may have understood that what is the difference

Between Tax and TDS, and how you can save your TDS deduction

To save TDS deduction doesn't mean that you have avoided the Tax

Even then you have to pay the Tax, but you can avoid Tax deduction at the source

By using these tips and tricks,

[ MUSIC ]

>> MANDEEP : Anyone lucky winner who will answer the today's question right will get

PAYTM cash of Rs 51, and the question is on your screens now

If you had watched our previous video on FD where we explained to you in how much time

Your money gets doubled, and what is the formula for it

Based on it I ask you that if on your FD you are given an interest of 8.5%

Then in how many years your many will get doubled

Your options are now available on the screen

You have to not answer it more than one time

And you have to also type the answer with the option in the comments section

We will meet you soon in the next video till then don't forget to subscribe,

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