[TBD]Tax savings in Indian Taxation

Income tax on saving bank interest

Bank doesn't deduct TDS for this interest for any amount. However, it is taxable if tax amount exceeds 10K.

However, deduction under section 80TTA is allowed on interest from savings account with a maximum of Rs.10,000/- per year. This deduction is available only to individual and HUF. For example: Raahul earns Rs.8000 from his saving accounts, so he does not have to pay any tax for it. But Gaurav earns Rs.15000 from his savings accounts, so he needs to pay income tax on Rs.5000 according to his tax slab

Income tax on fixed deposit

Bank deducts TDS if tax exceeds 10000. It is done at the rate of 10% in case PAN card is mentioned.

Interest earned from fixed deposits is liable to be taxed on accrual basis at the slab rate applicable. Interest on Fixed is fully taxable at Income tax slab rates applicable to the person. There is no separate deduction of Rs. 10,000/- as available in the Savings account interest.

If your income slab doesn't fall into taxable slab (for example, housewife having FD) and bank deducts TDS (interest beyond 10K), then it is not right. To avoid it, person should inform bank.

Reference

http://www.cainindia.org/news/7_2016/do_you_how_to_calculate_tax_on_your_interest_income.html

https://www.quora.com/Investment-Strategies-How-can-I-save-tax-on-the-interest-earned-on-a-Fixed-Deposit-FD

https://blog.cleartax.in/fixed-deposits-pay-income-tax-interest-income/

https://in.finance.yahoo.com/news/fixed-deposit-taxes-%E2%80%93-how-do-they-work-052526189.html

http://articles.economictimes.indiatimes.com/2015-03-09/news/59931780_1_tds-rules-tax-collections-tax-deduction