Is the bank deducts tax if the balance in savings account crosses one lakh rupees, how much amount in savings account in a bank is permissible without tax.
Asked on 8/22/12, 5:41 pm
3 Answers from Attorneys
J. Radhakrishnan
independent Practice
No tax deduction on domestic savings bank account unless it is NRO account
Answered on 8/22/12, 11:25 pm
Fca Prashant Chavan
Expert Edge LLP
23.08.2012
Dear Sir / Madam,
Interest earned on balance in Savings A/c to the extent of Rs. 10,000/- per financial year is exempt from TDS (Tax Deduction at Source). Banks normally pay 6% simple interest on average balance in Savings A/c.
In case the average balance in your Savings A/c for the year is Rs. 1 lakh, you will earn simple interest of Rs. 6,000/- for the financial year only which is exempt from tax. For calculation purposes, an average balance upto Rs. 1,66,666/- per year will be exempt from TDS.
Financial Year : April to March
Regards,
FCA Prashant Chavan
Mumbai
(You can also mail me for any further on-line advice at prashant.pscl07@gmail.com)
Answered on 8/23/12, 5:25 am
Aniruddha Pawse
Aniruddha.P.Pawse Advocates
i agree with Adv Chavan
Answered on 9/06/12, 10:58 pm
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