Bank FD: Get FD done in wife’s name, you will get this huge benefit with huge interest.

 

As per the FD rules, if you earn more than Rs 40,000 in interest on fixed deposits in a financial year, you will have to pay TDS at the rate of 10%. On the other hand, if you make an FD in your wife’s name, you can save this TDS.

Bank FD: Amidst the growing interest of common people in mutual funds and stock market, bank FD still remains the safest investment. Investors get fixed and guaranteed returns in bank FD. This is the reason why even today a large section of the country considers investing in bank FD to be the best and safest. Usually employed people get FD done in their name. But if you get FD done in the name of your wife, then you will not only get huge returns but can also save a lot of money.

TDS is deducted on interest of more than Rs 40,000

According to the rules of FD, 10 percent TDS will have to be paid on receiving interest of more than Rs 40,000 on fixed deposit in a financial year. On the other hand, if you get FD done in the name of your wife, then you can save this TDS. Usually in normal families, women are either in the lower tax bracket or are housewives. If your wife is a housewife, then understand that you will not have to pay any kind of TDS.

Exemption from TDS on taxable income less than Rs 2.5 lakh

Actually, people whose total taxable income is less than Rs 2.5 lakh are completely exempted from TDS on their FDs. Along with this, you also have to understand that the interest received from bank FD is counted in your income. Suppose your total annual income is Rs 9 lakh and you have received Rs 1.20 lakh as interest on FD, then your total annual income will be considered as Rs 10.20 lakh and you will have to pay tax on the basis of Rs 10.20 lakh.

Benefit will also be available on joint FD account

But if you make an FD in the name of your wife, then you can avoid paying additional tax due to FD interest. Apart from this, if you make a joint FD and make your wife the first holder, then in such a situation also you can save a lot.

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