TDS Archive

Are Recurring Deposits tax free in India? To clear this confusion, below I have penned down all the must know information about Recurring Deposit. What is Recurring Deposit? Recurring Deposit is a SIP under which you have to pay certain agreed amount for a particular time period. Unlike fixed deposit where a lumpsum amount is deposited at once, in recurring deposit a regular monthly amount is deposited. You have to select the term and amount of the investment. What are Tenure, Interest Rate and Minimum Deposit of Recurring Deposit? Tenure Most of the Banks offer Recurring Deposit of 6 months to 10 years. The tenure can be in multiple of 3 months. Installment Almost all banks offer this scheme and you can invest as little

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Frequently Used TDS Rates & Related Provisions Financial Year 2014-2015 (AY 2015-2016) A new section 194DA has been introduced in Budget 2014 under which sum received from insurance company will be liable to TDS at 2%. Read more: Tax on Insurance Maturity Policy I have not added section 194DA in the table below since it is not yet passed. Section Nature of Payment Threshold Limit Individual/HUF Others 193 Interest on Debentures Rs.5,000 p.a. 10% 10% 194 Deemed Dividend – 10% 10% 194B Lottery/Cross Word Puzzle Rs.10,000 30% 30% 194BB Winnings from Horse Race Rs.5,000 30% 30% 194A Interest from Banking Company Rs.10,000 p.a. 10% 10% 194A Interest from other than banking company Rs.5,000 p.a. 10% 10% 194C Contractors (including advertising & sub-contractor) Rs.30,000 single transaction or

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Section 194DA: 2% TDS on Life Insurance Policy Maturity Amount Current Scenario Currently, under section 10(10D) any sum received from life insurer is not taxable if the premium paid does not exceed 10% of the sum assured. Taxpayer would be liable only if he has paid premium more than 10% of the sum assured in any financial year. In that case the sum received would be added to his income under the head “Income from Other Sources” and taxed as per the slab. Changes made in Budget 2014 Since there was no TDS, many taxpayers used to avoid the tax by not disclosing it in ITR. To overcome this issue Finance Minister in Budget has proposed to insert a new section 194DA under which TDS

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How to Avoid TDS on Fixed Deposit Interest in India? Last year return of fixed deposit beat both Nifty returns and returns from gold. While investors in gold faced negative returns, the Nifty gained just 6.6 per cent in 2013. Bank fixed deposits pre-tax returns had generated as much 9-9.5 per cent. Keeping in the mind the above statistics, one more benefit of investing in bank fixed deposit is that it saves your tax as it is covered under section 80C of income tax of India. But not all the fixed deposits save tax, a term deposit of 5 years falls under this category. Recommended Read: Avoid TDS by Submitting Form 15G or Form 15H FAQs of Form 15G and Form 15H Download Revised Form 15G

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What is Form 26AS? Form 26AS is a consolidated Tax Credit Statement issued under rule 31 AB of Income Tax Rules of India to PAN Holders. Form 26AS shows the amount of Tax Deducted (TDS) from your income and is available as credit against your tax liability, if any. Let’s say you have a fixed deposit of Rs.10 lacs with Bank of Baroda @ 8% p.a. Bank paid interest of Rs.18,000  (Rs.20000-Rs.2000) after deducting TDS of Rs.2000 under section 194A for the period of 3 months i.e. from April to June and then bank filed TDS return in July. Now after filing TDS return by bank, tax credit of Rs.2,000 will get reflected in your respective Form 26AS. In case your tax credit is not

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 TDS not to be Deducted on Service Tax Component shown Separately Whether to deduct TDS on Service Tax Amount? This question had always put deductor in difficulty. The question always comes that whether TDS is to be deducted on the entire amount of the invoice i.e. including service tax or only on the payment made towards services i.e. excluding service tax. Since there was no clarification on this, deductor, to be in safer side tends to deduct TDS on the entire invoice amount including service tax except in the case of rent under section 194I. Circular No. 4/2008 : CBDT had earlier issued a Circular No. 4/2008 dated 28.04.2008 clarifying that TDS is to be deducted under section 194I of the Income-tax Act, 1961 on

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HC stays Late Filing Fees u/s. 234E for late filing of TDS/TCS Return Kerala High Court has granted interim stay on Levying of Fees for failure of filing TDS/TCS statement on time under section 234E. Section 234E which was inserted by Finance Act, 2012 provides a late fee of Rs.200/- per day’s delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS). The constitutional validity of Section 234E of the Income Tax Act, 1961 has been challenged in the Kerala High Court in the case of Narath Mapila LP School vs. UOI WP (C) No. 31498/2013(J). Vide an interim order dated 18.12.2013, the High Court has admitted the Petition and granted a stay of proceedings for a period

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