How can I bypass TDS on FD interests?

Fixed deposits have for long been a popular choice of investments with banks. Banks pay an interest on fixed deposits, which is taxable considering it as “Income from other sources”. The tax on interest earned is paid partially through Tax deducted at source (TDS) and partially through self-assessment of tax while filing returns. 

Every bank before paying interest on FD deducts TDS if such interest is more than Rs. 10,000. (Section 194A) per the following schedule:

1. TDS is deducted only if the interest payable is more than 10,000 per year. 
2. TDS is to be deducted at the rate of 10% on the gross interest. 
3. The rate will be 20% if the PAN card is not provided.

Leveraging form 15G, one can bypass TDS. Form 15G is applicable for investors below 60 years of age with:

1. Estimate of total income tax per income tax act provision is zero
2. Total interest earned through investments in the financial year, falling under the tax exemption slab, is below Rs 40,000

Similarly, the 15H form is applicable for investors over 60 years and above with zero tax on their income.

Also, Read About: 5 Year Fixed Deposit Tax-Free

By simply filling up the required details, and attaching your PAN card copy, you can save your interest amount from TDS.

Also, Read Related Article: Easy Ways To Bypass TDS On Fixed Deposit Interest