TDS limit on Bank Interest may be hiked in Budget 2007
Tax is deducted at source by the Banks if the total payout of interest on Fixed deposits is more than Rs. 5000, whether the payee’s income is taxable or not and thereafter if the payee’s income does not fall in the tax bracket, he has to follow the cumbersome procedure of getting refund of the tax deducted at source. It is expected that the Budget 2007 will bring some relief to such people as the limit of Rs. 5000 may be hiked. This will benefit the senior citizens who have a tax free income of Rs. 185000 and usually put their money in fixed deposits or post office’s saving schemes. This will also bring some relief to the banks. It will save their employees precious time being taken in the administrative jobs of managing Tax deducted at source and generating TDS certificates for each individual at the end of the financial year.