4. TDS Is Only An Interim Tax

Don’t forget the interest earned on your fixed deposit is fully taxable. If the interest amount gained exceeds 10,000 in one year, the bank or financial institutions will deduct 10.3 percent tax at source before you get the amount. Your tax liability doesn't end here. If you are in a higher income bracket that is your annual income is more than 5 lakh, you will have to pay more tax on this income.

Even if the TDS has not been deducted, you should mention the income from FDs and bonds in your tax return. Don’t forget that the tax on you interest amount gained is levied on an accrual basis. You may have invested in a swelling deposit, but taxes have to be paid every year.

On the other hand, if you are in a low income bracket that is your income does not exceed the basic tax exemption, you can receive this TDS back by filing your tax return. To avoid the TDS, you can submit a declaration under Form 15G to inform that your income is below the taxable limit.