TDS is only an interim tax

There is something known as the tax deduction at source (TDS) which is taxable at the interest that earned from the fixed deposit. So if the interest exceeds 10,000 in a year then the bank or the corporate house will deduct 10.3 percent tax at the source. In addition to this, if the invidual belongs to the higher income bracket then he will have to pay more tax.

If the TDS is not substracted then one must mention the income from fixed deposits and bonds in the tax return as the tax on the interest is levied on an accumulation basis and one might have invested in a cumulative deposit, but still the tax has to be paid every year. If the person’s income does not exceed the basic tax exemption then he can get the TDS back by filling the tax return. For further changes, one must submit a declaration under Form 15G stating that his income is below the taxable limit. For senior citizens Form 15H will be applicable.