Fixed Deposit schemes have now become more lucrative for SBI, Post Office, HDFC, ICICI, Axis, PNB, BoB other bank customers. Thanks to a big announcement in the Budget 2019 by Finance Minister Piyush Goyal, customers will get more returns from their Fixed Deposits than they used to get till now.
Earlier, it was mandatory to pay TDS on interest income over Rs 10,000 from a fixed deposit account. The TDS threshold has now been raised to Rs 40,000. This means you won’t have pay TDS on interest income up to Rs 40,000.
In the Budget speech, Goyal said, “TDS threshold on interest earned on bank/post office deposits is being raised from Rs 10,000 to Rs 40,000. This will benefit small depositors and non-working spouses.”
You can use the new provision to gain more from Fixed Deposits. For example, if you open a 3-year FD with Rs 1,60,000 with ICICI Bank, the aggregate interest amount earned would be Rs 39,955. This won’t be taxed. Similarly, by investing Rs 1.5 lakh for three years in the same bank, the interest amount would be Rs 37,457 at 7.5% interest. You won’t have to pay any tax on this amount.
Earlier, the only way you could save income tax through fixed deposits was by investing in five-year tax saver FD schemes offered by the lenders. Now, you will be able to save tax and earn interest even on deposits of one to four years, depending on the invested amount and interest rates offered by the banks. For this, you can also take help of online fixed deposit calculators offered by several banks.