Banks are required to deduct TDS on FD interest as per income tax provisions. However, how to find out whether the TDS deducted is accurate and has also been deposited with the government on time?
You must be aware that if the interest income from bank fixed deposits (FDs) is more than the prescribed limit, then every year the concerned bank has to deduct TDS (Tax Deducted at Source) on it. However, someone may want to know whether the TDS amount deducted by the bank is accurate or not. It might be possible that they have deducted more or less amount by mistake. After all, mistakes can be made by anyone and banks are not an exception to it. It is also possible that the bank might have deducted TDS on interest income, but might have failed to deposit it with the government on time.
For instance, a customer of a leading bank of India recently tweeted – “Am a retired AGM and am appalled that you have not deposited the TDS amount deducted from interest on TDRs to my IT account yet. Deductions made in December 2017, February 2018 and March 2018. What are you doing with my money?”
This may happen in case of other bank customers also, although it is not necessary that the bank has dome something wrong in every such case. That is because it may get delayed because of some technical reasons also. Whatever be the case, if you are also worried about your hard-earned money and the TDS amount, then the solution to your problem is Form 16A (Quarterly Interest Certificate) or Form 26AS. Let’s discuss about both of them in detail.
How to find out TDS deducted
For FY 2017-18, as per Section 194A, all banks are required to deduct TDS on FD interest if the interest from a single FD or sum of all FDs with the bank is more than Rs 10,000 in a year (in case of senior citizens it is Rs 50,000 from this year). “Banks have to deduct TDS on the interest income which is due at the end of each quarter/ year, irrespective of the actual payment. Further, one thing to be kept in mind is that if your PAN is available with the bank, then TDS will be deducted @ 10%. However, if the bank does not have your PAN, then TDS will deducted @ 20%. That is why it makes sense to give your PAN details to your bank on time in order to avoid extra 10% TDS deduction,” says CA Abhishek Soni, Founder,tax2win.in.
You need to know that along with its statutory duty of deducting TDS, banks also need to issue quarterly interest certificates (Form 16A) to their customers. This certificate contains all the information relating to your interest income accrued during the quarter and the TDS deducted on it. So, every quarter by having a look at this form ,you can easily verify the amount of TDS deducted by your bank.
Alternatively, the TDS deducted by your bank can also be traced by your Form 26AS. Form 26AS is an annual statement containing details about the tax credit and the tax paid. It can be downloaded from the Income Tax Department’s e-filing portal.
However, “at this point of time, you can find details in your Form 26AS only up to December 2017. Why? Because the time period for filing the quarterly TDS return for the last quarter (Jan to March 2018) by the bank is still not over yet. The due date for filing it is 31st May, 2018. So, for examining the TDS of the last quarter from 26AS you need to wait until around 7th June 2018,” informs Soni.
Further, sometimes even after furnishing your PAN, the bank may deduct TDS @ 20% by mistake. However, you need not worry as it can be rectified! All you have to do is to just contact your bank, discuss about the discrepancy and they can rectify it by revising their TDS return. Afterwards, the correct information would get updated in your Form 26AS.
So, “never forget to give your PAN details to the bank. It is important to know that without furnishing the PAN details to the bank, TDS will not be reflected in Form 26AS, thereby, credit of the TDS will not be available at the time of filing the ITR. TDS credit is available only if it is reflecting in Form 26AS,” says Soni.
Thus, with the help of Form 16A of all the four quarters, you can easily view and verify the details of the TDS deducted on your interest income and start getting prepared for the income tax return filing for FY17-18. Alternatively, you can also verify it from Form 26AS for all quarters from the Income Tax Department’s website.