FD Even today it is the favorite investment option of Indians. This is a traditional investment, in which the risk is very low. From small and big banks to NBFCs also provide FD facility to their customers. Apart from this, corporate FD is also in vogue. However, the interest rate in FD is lower. Therefore, in long term investment, keep in mind that the return you get should be more than the inflation rate, otherwise the investment will be of no use.
TDS is levied on FD interest
Customers have to pay TDS on the interest received from fixed deposits i.e. FD. In such a situation, the income from FD will be added to your total income. In such a situation you will have to pay more tax. But if you make FD in your wife’s name, then you can save this tax.
It will be beneficial if you make an FD in your wife’s name.
Most women either fall in the lower tax bracket or are housewives. Housewives are not liable to pay any tax. In such a situation, if you make an FD in your wife’s name, you will be saved from paying TDS. Along with this, you can also avoid paying more tax.
When is TDS deducted?
If the interest received from FD is more than Rs 40,000 in a financial year, then you will have to pay 10 percent TDS. If your wife’s income is low then she can avoid TDS payment by filling Form 15G. If you make a joint FD with your wife and make her the first holder, you can also avoid paying higher taxes along with TDS.
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