4 Ways To Easily Save TDS on Fixed Deposit In India

save tds on fixed deposit in india

What is TDS? How to Save TDS On Fixed Deposit?

TDS stands for Tax Deducted at Source and we can say that it is a means to collect income tax in India. If you want to file TDS return you can do it online and it is very easy to do, just visit Income tax India e filing official site and you can submit your TDS return.

Fixed deposits are seen as a relatively safe option when it comes to investment returns, especially when fixed or assured ROI. However, who does not take Tax Deducted at Source or TDS into account can stand to regret it later.

However, there are many ways you can implement to easily avoid TDS on fixed deposit. Let’s have a look!

save tds on fd

Implement these tips to Save TDS On Fixed Deposit

  • Perfect your timing

TDS is currently calculated and charged on a Fixed Deposit investment if the interest earned on it in a year is in excess of Rs.10,000. However, by timing your fixed deposit plans, you can earn under the threshold and save on TDS on fd. Investing 1 year in FD in the month of September should mean the interest gained will be divided between two fiscal years, will help you stay under the threshold and avoid TDS on fd.

  • Divide and do it to Rule

Another alternate method of save TDS on fixed deposit is by not investing only in one scheme and gaining Rs.10,000 as interest income on it in a single year. Yes, you can go ahead and easily open smaller FDs so that their interest income does not reach Rs.10,000.

  • Strengths in Numbers

Another method of avoid TDS on fixed deposit is by opening a fixed deposit jointly with a family member and put your name in the second. You need to know that it is the primary account holder who is liable for the tax. It means that you can easily save TDS on fixed deposit.

  • Make sure to go through the Fine Prints

The above-discussed tips to tricks to avoid TDS on fixed deposit are of no use unless your exemptions and returns are declared properly. Yes, you need to be aware that there are dedicated forms dedicated only for TDS such as Form 15G and Form 15H. Either of these forms must be filled in correct order to inform the government authorities that you are not yet eligible for a TDS deduction.

What’s more, there is also confusion with things which are different with a tax saving fixed deposit pertaining to if they are subject to same taxes like that of TDS. You should note that in a tax saving FD, the initial amount that you invest is exempted from tax: however, the earned interest is always subject to conventional TDS rules as discussed.

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The Bottom Line

Now that you know what tricks to apply while planning to save TDS on fixed deposit, implement it and be on your way to a stress-free investment! Happy FD investment!