Now you will get more interest on making Fixed Deposit (FD) in Canara Bank. The bank has increased the interest on FD. Now on getting FD in Canara Bank, you will get interest ranging from 4.00% to 7.25%. At the same time, interest ranging from 4% to 7.75% is being offered to senior citizens.
Now 7.00% interest on 1 year FD
According to the new interest rates, if you now make FD in Canara Bank for 1 year, then you will get interest at the rate of 7.00% annually. At the same time, 6.85% interest will be available on FD of 2 years. The bank is offering 7.25% interest on 444 days FD.
Tax is also to be paid on the interest received from FD
Interest received from FD is fully taxable. Whatever interest you earn on FD in a year, it gets added to your annual income. Based on the total income, your tax slab is determined. Since the interest income earned on FD is considered as “Income from other sources”, it is charged under Tax Deducted at Source or TDS. When your bank credits your interest income to your account, TDS is deducted at the same time.
Let us know some points related to tax on FD:
- Banks do not deduct TDS on Fixed Deposits if your total annual income is not subject to income tax. However, for this you will have to submit Form 15G or 15H. In such a situation, if you want to save TDS, then definitely submit Form 15G or 15H.
- TDS is not deducted if your interest income from all FDs is less than Rs 40,000 in a year. On the other hand, if your interest income is more than Rs 40,000, then 10% TDS will be deducted. Bank can deduct 20% for not giving PAN card.
- This limit for deducting TDS on interest income above Rs 40,000 is for people below 60 years of age. On the other hand, the income of senior citizens above 60 years of age up to Rs 50,000 from FD is tax free. 10% TDS is deducted if the income is more than this.
- If the bank has deducted TDS on your FD interest income and your total income is not subject to income tax, then you can claim the deducted TDS while filing tax. This will be credited to your account.
