If you are also thinking of earning from fixed deposits, then this news may shock you. Earnings from fixed deposits are going to decrease now. FD is also generally seen as a safe investment. But do you know that this profit of yours can be reduced after tax deduction. Suppose you are also being given a return of 7 or 8 percent on fixed or term deposits. So now after the new rule of TDS comes, your return will be reduced.
TDS rule for Fixed Deposit: According to media reports, TDS ie Tax Deduction Service Charge of 10% is going to be levied on the income earned from Fixed Deposit i.e. your return. This tax deduction is to be deducted according to the total income and tax slab of the person. On the other hand, people who are in the higher tax slab will not be able to claim this tax deduction during income tax filing.
Received this much post tax deduction return: Funds India's May report says that SBI, PNB, HDFC and ICICI banks are giving an average interest rate of 5% on deposits of 6 months. At the same time, after tax deduction, it is becoming 3.49%. Similarly, 6.75% interest is also being given on 5 years deposit. Which has now become 4.9% after tax deduction.
Why investing in FD is beneficial?: Investing in Fixed Deposit is always being said to be beneficial. Because there is no effect of sinking of bank or market on it. In this, your money remains safe for a limited time. At the same time, you can also withdraw this money if required.
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