When do I become liable for TDS?
You become liable for TDS* when the aggregate interest you earn for all deposits held in a particular customer ID is greater than Rs. 40,000/- (Rs.50,000 in case of senior citizen) in a financial year.
Disclaimers:
* Deposits held by minors are also subject to TDS. The credit for the TDS can be claimed by the person in whose hands the minor's income is included.
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When is TDS deducted?
TDS is deducted every time the Bank pays/re-invests interest during the financial year in accordance with the provisions of Income Tax Act as amended from time to time.
TDS is deducted every time the Bank pays/re-invests interest during the financial year. TDS is also deducted on unpaid interest accrued at the end of financial year viz. 31st March.
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Can TDS be recovered from principal of deposit in any case?
When interest amount is insufficient to recover TDS, the same is recovered from the principal of the deposit.
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Can the maturity amount of the deposit reduce due to TDS?
Yes, in case of reinvestment deposits, the interest reinvested is post TDS recovery.
Therefore, the maturity amount for re-investment deposits varies to the extent of tax and compounding effect on tax for the period subsequent of deduction till maturity.
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Does any change or enhancement in my deposit portfolio affect TDS liability?
TDS is deducted every time the Bank pays/re-invests interest during the financial year. TDS is also deducted on unpaid interest accrued at the end of financial year viz. 31st March.
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