TDS Threshold On Deposit Interim Finance Minister Piyush Goyal has also extended relief to conservative fixed deposit investor by proposing TDS threshold for interest earned on them be increased to Rs. 40,000 instead of the current Rs. 10,000.
And the call needs to be made, as the earlier increase to Rs. 10,000 threshold was made decades ago and this proposal makes sense given the inflationary trend and as the tax slab and the income levels of the individuals have changed during the time.
So, in case the taxpayers assesses to not fall in the taxable income slab, he can given his declaration to the bank where he has maintained his deposit in form 15G or 15H as the case may be.
The move is expected to reduce administrative work for the bank fixed depositor who earlier over and above the 10% TDS on interest over Rs. 10,000 in a financial year on a bank deposit, was required to assess his tax liability based on the slab rate and pay tax wherever applicable.
So, now the banks will come into action or deduct TDS only if the interest on deposits exceeds Rs. 40,000 in a fiscal year. Form 26 AS can be accessed to study the status of an individual assessee.