Now you will get higher interest on Fixed Deposits.
Banks Raise FD Interest Rates: Kotak Mahindra Bank, ICICI Bank, and Yes Bank have raised the interest rates on Fixed Deposits (FD). Now you will get an interest up to 7.50% on Fixed Deposits. Also, sharing with you interest rates on the State Bank of India Fixed Deposits (SBI FD), Post Office Time Deposit Scheme (POTDS), and FD interest rates of these banks so you get the best deals by investing your money in the right place and as per your choice.
Duration ICICI Yes Bank Kotak Mahindra POTDS SBI
1 year 6.70% 7.25% 7.10% 6.90% 6.80%
2 years 7.10% 7.25% 7.10% 7% 7%
3 years 7% 7.25% 6.50% 7% 6.50%
5 years 7% 7.25% 6.20% 7.50% 6.50%
Interest On Fixed Deposits Is Taxable
The interest received from FD is fully taxable. Whatever interest you earn on FD in a year is added to your annual income. Based on the total income, your tax slab is determined. Since interest income earned on FD is considered “Income from Other Sources”, it is charged under Tax Deducted at Source or TDS. When your bank deposits your interest income into your account, TDS is deducted at the same time.
Important Features Related To Taxes On Fixed Deposits
The bank does not deduct TDS on fixed deposits if your total income is less than Rs 2.5 lakh in a year. However, for this, you will have to submit Form 15G or 15H. If you want to save TDS then you have to submit Form 15G or 15H.
If your interest income from all FDs is less than Rs 40,000 in a year, then TDS is not deducted. Whereas if your interest income is more than Rs 40,000 then 10% TDS will be deducted. The bank can deduct 20% for not providing the PAN card.
This limit for deducting TDS on interest income more than Rs 40,000 is for people below 60 years of age. At the same time, income up to Rs 50 thousand from FD of senior citizens above 60 years of age is tax-free. If the income is more than this, 10% TDS is deducted.
If the bank has deducted TDS on your FD interest income and your total income does not come under the ambit of income tax, then you can claim the deducted TDS while filing taxes. This will be credited to your account.