Skip to main content

How to avoid paying taxes on interest income


Do you wonder why interest earned from your FDs or interest bearing securities like bonds gets reduced due to tax deducted at source? Does it irritate you that tax has been charged even though you aren’t eligible to pay taxes?

Here, we tell you about why TDS applied and ways to avoid this tax deduction if you meet certain criteria.

Why should I know this?

If you are like most Indians, chances are the bulk of your liquid savings are in a bank account or in an FD. Some of us are invested in bonds. While these fixed income instruments are good for guaranteed returns, they are relatively tax inefficient instruments because you end up paying taxes on the interest income that you earn.

This tax is usually deducted at source, and there might be a situation where tax is being deducted even though you are not eligible for paying taxes. This could result in a cash flow problem because your tax outflow is today, but your refund might take many months to arrive.
How much is the TDS on interest from deposits and securities?

Popular posts from this blog

Love, Sex and Adultery in Ancient Egypt

Women had more freedom than their counter parts in Mesopotamia, for instance, but never as much as Paris Hilton and pals. Egyptians married young, very young indeed, and, in royal families, between themselves. Childbirth was dangerous but encouraged in ancient Egypt - prosperity was a goal for everyone and that included having a big family. The love and sex lives of the Egyptians were as complicated as they are today. Turin's famous Erotic Papyrus assures us that the Egyptians were sexually adventurous, with a penchant for naked belly-dancing, and collections of love poetry from the Amarna era reveal that they were also big romantics. According to Angelina Jolie in recent news “fidelity is not essential in her relationship with Brad Pitt”, but adultery is one of the oldest reasons for divorce, death and depression - the 3 D’s - and in ancient Egypt as in most of the modern world, women often still file for divorce on the grounds of adulte...

Sample of Rajasthan architecture

GLITTERING LIKE A JEWEL: Sri Sankeshwar Paraswanath temple. Photos: S. Siva Saravanan Sri Sankeshwar Paraswanath temple, in R. S. Puram, Coimbatore, is a magnificent specimen of Rajasthan's intricate architecture. Dedicated to Sri Sankeshwar, the 23rd teerthankara, this 25-year old temple is a well-known Jain pilgrim centre. Acharya Vikram Suriswarji performed the `Anjan Shalaka Pran Pratishta' (Kumbhabhishekam) of this temple in 1981. He was the inspiration behind the Coimbatore Jain Swetambar Murthipujak Sangh which has sponsored this temple. The temple has three garbhagrahas — Sri Sankeshwar (at the centre), flanked by Sri Shanthinath and Sri Mahavir. Separate niches There are also separate niches for Sri Munishwar, Sri Adinath and Sri Sumathinath. This temple, situated on the busy Ponnurangam road, glitters like a jewel. All people, irrespective of their faith, are welcome inside. However it is expected that only vegetarians enter the precincts. The temple, built on the li...

Born poor, now self-made billionaires - Ed Liddy

Ed Liddy, former chief executive officer of American International Group (AIG ) had to face lot of hardships before he rose to great heights. Ed Liddy's father died when he was just 12 years old. According to a BusinessWeek report, he had a poverty-stricken childhood. Liddy graduated from Catholic University of America in 1968 and received a master's degree in business administration from George Washington University in 1972. He worked with Ford Motor before joining G D Searle & Co in 1981. The 63-year old Liddy earned about $130 million during his eight-year tenure at Allstate. In the wake of the financial crisis, Ed Liddy came to rescue the ailing AIG, worked for a salary of $1. But the act turned disastrous when the company handed out employee bonuses totally $165 million after it had accepted $170 billion in government bailout funds. This forced him to quit AIG.