Explained: Your Fixed Deposit Returns and Taxation

Explained: Your Fixed Deposit Returns and Taxation

Paytm Payments Bank provides Fixed Deposit facility to its customers in partnership with IndusInd Bank.

The article below contains all the information you need to understand your returns, how TDS is deducted and how to get your Interest & Tax Certificates to file your Income Tax Returns (ITR).

It also explains how to submit your Form 15G/H in case your total earnings in the Financial Year are not taxable.

How do I see my total interest Income in a Financial Year?

You can request an Interest Certificate from Paytm App and get this in your mailbox within a few seconds.

You have to declare this interest income (including the Interest paid out and accrued) under the head “Income from other sources” in your Income Tax return filing.

Are returns from Fixed Deposit Taxable?

Yes. Interest income on Fixed Deposit is taxable. It is taxed at the slab rates applicable on your Total income in a financial year.

April 2019 onwards, if the Interest income on FD in a FY is greater than Rs. 40,000, then tax @10% (PAN users) & @20% (non-PAN users) of interest is deducted as TDS from your Interest income.

For previous financial year FY 18-19, TDS was applicable on interest income in excess of ₹10,000 @10% (PAN users) & @20% (non-PAN users)

TDS certificate (Form 16A) provides you with the details of Tax that has been paid to the Income Tax department on your behalf from the interest income on FD. TDS certificate can be requested from Paytm App.

Further, at the time of ITR filing, you can adjust this TDS against your Tax liability.

How do I request for an Interest Certificate?

Interest certificate for the current FY will be available at the end of this year. Follow the steps below to download Interest Certificate:

  • Launch Paytm Bank → Click on ‘Fixed Deposit’ → Click on ‘Manage Fixed Deposit’ → Click on ‘Get Interest Certificate over Email’
  • Select ‘Financial year’ for which you need the Interest Certificate and Confirm. Interest certificate for the selected FY will be sent to your registered Email ID within seconds.

How do I request a TDS Certificate?

TDS certificate is issued one month after each quarter of the Financial year. To illustrate, TDS Certificate Q1 (Apr1-Jun30) will be available at the first week of August.

This certificate is issued to PAN users only. Follow the steps below to request TDS certificate:

  • Launch Paytm Bank → Click on ‘Fixed Deposit’ → Click on ‘Manage Fixed Deposit’ → Click on ‘Get TDS Certificate over Email’
  • Select ‘Financial year’ and the ‘Quarter’ for which you need the Interest Certificate and Confirm. TDS certificate for the selected FY and Quarter will be sent to your registered Email ID within seconds.

How do I adjust the TDS while filing my ITR?

TDS amount, as indicated in the TDS certificate, can be adjusted against your total Tax payable at the time of filing income tax returns.

If your total Income (inclusive of FD interest income) falls under the Tax slab –

  • 0% Tax Slab (i.e. not in the taxable limit): You can file a refund for the entire Tax that the Bank has deducted.

    Note: To avoid Tax deductions by the Bank and the hassle of filing for a refund, file Form 15 G/H at the start of the FY.
  • 5% Tax Slab: You can file a refund for the 5% of the Interest as the Bank has deducted a Tax of 10%.
  • 20% or greater Tax Slab: You have to pay the remaining Tax i.e. Tax in excess of 10% that was deducted by Bank.

    Say, a user in 30% Tax bracket will have to pay the remaining 20% as the Bank has deducted only 10%.

What if my total earnings (including interest from Fixed Deposit) in a Financial Year are not in the taxable bracket?

You can submit Form 15 G/H in such cases with instructions to not deduct TDS, provided you meet the below criteria:

  • You have a valid PAN and are a resident Indian
  • Tax calculated on your Total income in Nil i.e. your total income is less than the basic Income tax exemption limit. Refer the below table for age-wise limits.
  • You have atleast one active FD at the time of filling up Form 15 G/H.
  • Total Interest income on FD is less than the Basic Income Tax exemption limit.
Age of customer Income Tax exemption limit Form to be Filed
< 60 years Up to ₹2,50,000 Form 15G
60 to 80 years Up to ₹3,00,000 Form 15H
> 80 years Up to ₹5,00,000 Form 15H

To file Form 15 G/H at your convenience:

Launch Paytm Bank → Click on Fixed Deposit → Click on Manage Fixed Deposit → Submit Form 15G/H

Should I file Form 15G/H every financial year?

Yes! Form 15G/H is valid for only one financial year. A new form has to be filed at the start of each financial year.

I forgot to file Form 15G/H. What do I do now?

File Income Tax return to seek a refund of excess TDS deduction since the Bank has already deposited the TDS to the income tax department.

Also, submit Form 15G/H at the earliest to avoid Tax deduction for the remaining financial year.

I submitted Form 15G/H but I have taxable income. What should I do?

You must intimate us immediately that your income is taxable. We will then start deducting TDS accordingly.

Kindly note that Form 15G/H is a statutory declaration filed by you. Before submitting Form 15G/15H online, you should verify the information furnished in the form is true, correct and complete in all respects.

Any person making a false declaration is liable to prosecution under section 277 of the Income Tax Act, 1961.

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