427 (Income tax ) Why bank deducting tax when my interest income below threshold limit ? Solution - By Amlan Dutta Video Solution - https://youtube/watch?v=jEmbTXSVKHg I will be honest in admitting that this may come to many peoples mind but they never ask due to shyness .. Arey kya sharam , i ask ....were everybody dorn super geniuses ...if yes , then the worl would be full of einsteins ... It is a shame to see that people fear to ask their doubts because the people they ask is never forthcoming with the full answer Anyways , lets attack the issue You see , TDS deduction on expense ( Income for deductee )has no relation to income tax applicable as per income tax slabs to the individual... The TDS deduction is done as per expense head and the section guidance available in the act to deduct taxes accordingly The deductee will finally pay only taxes as per income slabs ... But here lies the most important difference that skips the eye and so let us make it paani paani with a example I have a 20 lac FD with Axis bank ...Axis bank gives me 10 % interest ..i.e 2 lacs ...but while remitting me the interest income , it just gives me 180000 and deducts 20000 TDS ...it makes no difference to the bank that my total income itself is just from interest income and so i fall below the threshold limit As per law , it will have to deduct TDS @ 10 % on the interest (of FD amount ) under section 194 A Later , the income tax applicable to me is however nil (assuming that my total income is just from this FD interest income.) So when i file the return , it is called refund return and i get the refund of this extra deducted TDS by the bank (For the experienced readers , one can always submit the form 15 g /15 h (for senior citizens ) to avoid TDS deduction in the present case , but i hope the concept is clear now Humble regards , Amlan Dutta
Posted on: Mon, 12 May 2014 12:09:26 +0000
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