Five Year Tax Saving FD

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Tax Deductions for Re-investment Fixed Deposits 

The following will be applicable for a regular Fixed Deposit (FD) 

• TDS will be deducted when interest payable or reinvested on RD and FD per customer across all branches, exceeds ₹40,000, (₹50,000 for senior citizens) in a financial year. 

• TDS Certificate will be mailed to you after the end of every quarter during the financial Year providing the details of TDS deducted during the quarter. 

Effective August 9, applicable TDS rates are as follows:  
Effective May 14, 2020, till March 31, 2021, TDS rate is reduced from 10% to 7.5% on resident deposits. 

As per section 206AA introduced by finance (No.2) Act, 2009, effective April 1, 2010, every person who receives income on which TDS is deductible shall furnish his PAN, failing which TDS shall be deducted at the rate of 20% as against the existing TDS rate.  

TDS rate is applicable from time to time as per the IT Act, 1961 and IT rules. Today, TDS is recovered when interest payable or reinvested on FD and RD per customer, across all Branch, exceeds ₹40,000, (₹50,000/- for senior citizen) in a Financial Year. Further, TDS is recovered at the end of the financial year on Interest accruals if applicable. 

• If the interest amount is insufficient to recover TDS, the same may be recovered from the principal amount of Fixed Deposit. If a customer wishes to have TDS recovered from CASA, the same can be applied by filling separate declaration at branch. 

• For renewed deposits, the new deposit amount consists of the original deposit amount plus Interest Less TDS, if any, less compounding effect on TDS. For reinvestment deposit, the interest reinvested is post TDS recovery and "hence the maturity amount for reinvestment deposits would vary to the extent of tax and compounding effect on tax for the period subsequent of deduction till maturity. 

• As Per Section 139A(5A) of IT Act, every person receiving any sum of income or amount from which tax has been deducted under the provisions of IT Act shall provide his PAN to the person responsible for deducting such tax. In case PAN is not provided as required, the bank shall not be liable for the non availment of the credit of Tax deducted at Source and non-issuance of TDS certificate. 

• If your PAN is not updated with the Bank or is incorrect, please visit your nearest branch to submit your PAN details. 

• No deductions of Tax shall be made from the taxable interest in the case of an individual resident in India, if such individual furnishes to the Bank, a declaration in writing in the prescribed Format (Form 15G / Form 15H as applicable) to the effect that the tax on his estimated total income for the year in which such interest income is to be included in computing his total income will be Nil. This is subject to PAN availability on Bank records. 

• If the aggregated value of all outstanding FDs/RDs booked in same customer id during the Financial Year exceeds ₹5 lakh limit (*) then PAN/Form 60 is mandatory. 

• In absence of PAN/Form 60:  
  (a) FD/RD will not be renewed on maturity and maturity proceeds will be credited to your linked account or a Demand Draft will be sent to your mailing address as updated in Bank's records.  
    
  (b) Maturity instructions to convert RD proceeds to FD will not be acted upon and RD proceeds will be credited to your linked account on maturity. Fixed Deposits booked with monthly or quarterly interest payout option, TDS recovery will by default happen from linked current / savings account. Please visit nearest branch / contact RM for further clarification.

The maximum interest not charged to tax during the financial year where form 15 G/H is submitted is as below:  

• Up to ₹3 lakh for residents of India below the age of 60 years or a person (not being a company or firm). 

• Up to ₹7 lakh for senior citizen residents of India above the age of 60 years any time during the FY 

• Form 15G/ H to be submitted by customer in duplicate to the bank, for submitting one copy for Bank record and second copy to be returned to customer with Branch seal as an acknowledgment. A fresh Form 15G /H needs to be submitted at the start of every new Financial Year. In case form 15G/H is submitted post interest payout/credit, waiver shall be effective from the day next to the interest payout /credit immediately preceding the date of submission of form 15G/H. 

• Form 15G/H needs to be submitted for every Fixed Deposits booked with bank for Tax exemption. 

• The bank shall not be liable for any consequences arising due to delay or non-submission of Form 15G/H. 

• To enable us to serve you better kindly submit the Form 15G/H latest by April 1st of the new financial year.  
  

• Note: The above guidelines are subject to change as per Income Tax regulations /directives of Finance Ministry Govt. of India prevalent from time to time. 

Terms & Conditions 

*The (Most Important Terms and Conditions) for each of our banking offerings features all the specific terms and conditions that govern their use. You must go through it thoroughly to fully understand the terms and conditions applicable to any banking product you choose.    

Important Notice 

• As per section 206AA introduced by Finance (No. 2) Act, 2009, effective April, 01, 2010, every person who receives income on which TDS (This stands for Tax Deducted at Source, which means the tax you have to pay on your salary is already deducted and the net amount is received by you.) is deductible shall furnish his PAN, failing which TDS (This stands for Tax Deducted at Source, which means the tax you have to pay on your salary is already deducted and the net amount is received by you.) shall be deducted at the rate of 20% (as against 10% which is existing TDS (This stands for Tax Deducted at Source, which means the tax you have to pay on your salary is already deducted and the net amount is received by you.) rate) in case of Domestic deposits and 30.90% in case of NRO deposits 

• Please further Note that in the absence of PAN, as per CBDT circular no:03/11, TDS (This stands for Tax Deducted at Source, which means the tax you have to pay on your salary is already deducted and the net amount is received by you.) certificate will not be issued, form 15G/H and other exemption certificates will be invalid even if submitted and penal TDS (This stands for Tax Deducted at Source, which means the tax you have to pay on your salary is already deducted and the net amount is received by you.) will be applicable.