BANKING AFFAIRS

Detailed explanation-1: -The TDS is not deducted if the interest you earn on your recurring deposit is up to Rs. 10, 000. The TDS will be 20 percent, if you fail to provide the PAN information to the bank. Under Section 80C of the Income Tax Act, 1961, investments in bank RD are not free from taxation.

Detailed explanation-2: -Form 15G has to be submitted by the investors with no taxable income to avoid TDS on Recurring Deposits. Form 15G is applicable for people under the age limit of 60 years. Nowadays, almost all popular banks are offering online Recurring Deposit facility.

Detailed explanation-3: -No TDS is deducted on either Time Deposit (FD) or Recurring Deposit (RD) made with a post office. Senior Citizens (those above 60) can get up to Rs 50, 000 per year in FD interest tax-free and no TDS will be deducted for interest received up to Rs 50, 000 per annum for them.

Detailed explanation-4: -Investment in bank RD is not eligible for tax exemption under Section 80C of the Income Tax, 1961. Therefore, one cannot claim a tax deduction for investment in any of the bank recurring deposits. However, post office term deposit of 5 years is eligible for tax deduction under Section 80C of the Income Tax Act, 1961.