look news india
Bank FD: Amidst the increasing interest of common people in mutual funds and stock market, bank FD still remains the safest investment. Investors get fixed and guaranteed returns in bank FD. This is the reason why even today a large section of the country considers investment in bank FD to be the best and safest. Generally employed people get FD done in their name. But if you get an FD done in your wife’s name, you will not only get huge returns but you can also save a lot of money.
TDS is deducted on interest above Rs 40,000
According to FD rules, 10 percent TDS will have to be paid if interest of more than Rs 40,000 is received on fixed deposits in a financial year. On the other hand, if you get an FD made in your wife’s name, then you can save this TDS. Generally, women in normal families are either in lower tax brackets or are housewives. If your wife is a housewife then understand that you will not have to pay any kind of TDS.
Exemption from TDS on taxable income less than Rs 2.5 lakh
In fact, people whose total taxable income is less than Rs 2.5 lakh are completely exempted from TDS on their FDs. Along with this, you also have to understand that the interest received from bank FD is counted in your income. Suppose your total annual income is Rs 9 lakh and you have received Rs 1.20 lakh as interest on FD, then your total annual income will be considered Rs 10.20 lakh and you will have to pay tax on the basis of Rs 10.20 lakh.
Benefits will also be available on joint FD account
But if you make an FD in your wife’s name, then you can avoid additional tax on FD interest. Apart from this, if you get a joint FD and make your wife the first holder, then in such a situation also you can save a lot.