Sir,
Under Section 194 (A) of IT Act, Banks are authorised to deduct tax @ 10 percent from the amount of interest and pay the same to the Govt. But they cannot make such deduction of tax if the amount of interest payable/accrued on fixed deposits is equal to or less than Rs 10,000 in a financial year.
But small depositors, including senior citizen, housewives and widows are subjected to tax, even if the amount of interest paid/payable or accrued is less than Rs 10,000. In one case of a senior female depositor, tax was deducted at source, from the amount of interest which was only Rs 3685.
I would like to request the Govt and Income Tax Department to prevent the bank officials from deduction of tax at source, in case a Bank pays/credits interest on fixed deposit, which is less than Rs 10,000.
Usually, Bank official put up the excuse that TDS has been made by their head-offices which is absolutely false.
Yours etc…
Jessica Khajuria
Student MBBS
ASCOMS, Jammu
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