Recurring Deposits is now attract TDS
In Union Budget 2015 Finance Minister proposes to bring RD (Recurring Deposits) under the provisions of TDS. After applicability if interest earned on recurring deposits exceeds Rs. 10,000 during the year, TDS at the rate of 10 per cent would be deducted by the bank.
In recurring deposit investors invest a fixed amount every month in banks/post.Total Tenures of Recurring deposit may be differ as per the choice of investors like it may be 3-4 month to about 10 Years
Proposal of TDS on interest on recurring deposits, which is good saving instrument for salaried and middle class persons, will come into effect from June 1st, 2015
Till Now only fixed deposits comes under the ambit of TDS either it is in bank of Post offices.
Non senior citizens Investors can submit Form 15G to avoid TDS, for senior citizens, the form for avoiding TDS is 15H.
Interest earned on deposits with cooperative banks also been brought under TDS.
Finance Minister has also change the rules of TDS on interest earned from bank deposits. Prior to union budget 2015 if a person deposit branch wise and earned less than Rs. 10000/- TDS was not applicable .But now on wards TDS will be applicable if a person earned interest more than Rs. 10000/- from a bank with different branches.
It will certainly impact to investors who have multiple deposits in different branches of a particular bank. and interest is more than Rs. 10000/- in Total.
