I am employed in a PSU bank and would like an exemption from TDS deduction on my recurring deposits (RD) which are likely to mature in 2027 and 2030. Since my income is above the TDS exemption limit , I cannot submit Form 15G. However, I intend to pay tax in advance on the RD interest income. Can I get a TDS exemption certificate? The purpose of obtaining an exemption certificate is to protect the maturity value of the RD.
—Subodh Prasad Karnav
We understand that you are a resident of India and not a senior citizen (now as well as in the course of recurring deposit due dates).
In accordance with the Income Tax Act, when the interest income from term deposits with prescribed financial institutions for a fiscal year (AF) exceeds the prescribed limit (currently INR ??40,000), the TDS at the applicable rate will be deducted. When the individual’s total income is below the basic exemption limit, Form 15G may be submitted to the prescribed financial institution (including a bank) requesting that no tax be deducted on the income of the individual. interest paid to that individual on deposits.
Also, when the tax rate at which the total income is subject to tax is zero or less than the rate at which the TDS is deducted (regardless of any withholding tax paid by the recipient of the income), then a tax claim lower or zero The deduction certificate (LDC) can be established with the jurisdictional tax officer in the form prescribed by the recipient of the income. After reviewing the relevant documents, the tax official may, at his discretion, issue an LDC indicating a lower rate of TDS deduction. In this case, the TDS will be deducted at the rate specified in the LDC.
Separately, interest income from recurring deposits is taxable under “Income from other sources” (IFOS) according to the accounting method (i.e., cash / cash basis) that you use on a regular basis. . Therefore, if historically you were offering interest income / income from other sources on an accrual / revenue basis, you could also follow the same approach for income from these recurring deposits. Interest income will be taxable at the slab rates applicable to you for the respective financial year (AF) during which it is proposed for tax. Any TDS already deducted by the bank on these deposits in the relevant fiscal year will be available as a credit against the income tax that you will have to pay for the relevant fiscal year. If the taxes withheld at source are lower than the applicable tax rate, you will have to pay the balance of taxes by paying a deposit according to the prescribed installments.
My father is a former soldier. He receives a monthly pension and works as a security manager in a defense social protection company. How should he file an RTI?
—Name hidden on request
The monthly pension received by your father is taxable in his hands as salary income. The categorization of the income received by the social defense enterprise will depend on the exact terms of the employment contract (i.e. whether it is salary income, professional income, etc.). Such income should be reported accordingly in the applicable Income Tax Return Form (ITR), which should be filed online (or offline version in specified circumstances) on the Income Tax website.
Which ITR form is applicable to you would depend on various factors such as your other sources of income, the categorization of the defense welfare company income, the number of real estate properties owned and the nature of the assets. Depending on the ITR form, the details to be completed will vary accordingly.
Parizad Sirwalla is Partner and Head, Global Mobility Services, Taxation, KPMG India.
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