TDS is deducted on interest more than Rs 40,000
Bank FD: Amidst the increasing interest of common people in mutual funds and stock market, bank FD still remains the safest investment. Investors get fixed and guaranteed returns in bank FD. This is the reason why even today a large section of the country considers investing in bank FD to be the best and safest. Generally employed people get FD made in their own name. But if you make an FD in your wife’s name, you will not only get huge returns but can also save a lot of money.
TDS is deducted on interest more than Rs 40,000
According to FD rules, TDS of 10 percent will have to be paid if interest of more than Rs 40,000 is received on fixed deposits in a financial year. On the other hand, if you make an FD in your wife’s name, you can save this TDS. Generally, in normal families, women are either in the lower tax bracket or are housewives. If your wife is a housewife then understand that you will not have to pay any kind of TDS.
Exemption from TDS on taxable income less than Rs 2.5 lakh
In fact, people whose total taxable income is less than Rs 2.5 lakh are completely exempted from TDS on their FDs. Along with this, you also have to understand that the interest you get from bank FD is counted in your income. Suppose your total annual income is Rs 9 lakh and you have received Rs 1.20 lakh as FD interest, then your total annual income will be considered Rs 10.20 lakh and you will have to pay tax on Rs 10.20 lakh only.
You will also get benefits on joint FD account
But if you make an FD in your wife’s name, then you can avoid paying additional tax on FD interest. Apart from this, if you make a joint FD and make your wife the first holder, then in such a situation also you can save a lot.
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