Modi Government Want the people of India to fall in love with Fixed Deposit again.
Finance Minister proposed to raise the TDS limit on interest earned on bank deposits/post office deposits under Section 194A of Income-Tax Act to Rs 40,000 from Rs 10,000 currently The Interim Budget proposal to hike tax deducted at source (TDS) limit on interest earned is likely to make bank deposits attractive
This hike in TDS limit is long- pending demand, Assuming 7.5 percent rate of interest, on an average every term deposit holders would accrue interest income of Rs 20,000, out of which an investor at present has to pay TDS on Rs 10,000. Now, the FM proposes to raise the limit for TDS on interest income to Rs 40,000. This will provide a big relief to small depositors and they may escape tax on term deposits up to Rs 5 lakh. Banks may see a surge in term deposits going forward,” the bank said.