SBI RD Scheme 2019-20: A recurring deposit is a special kind of term deposit offered by banks which help people with regular incomes to deposit a fixed amount every month into their recurring deposit account and earn interest at the rate applicable to fixed deposits.
In a periodic interest payout option, SBI would transfer the interest earned at each interval (say, quarterly) to your bank account. The interest would remain the same across the life of the deposit. On maturity of RD, unless the deposit is renewed, would transfer the principal amount to your bank account. In case you opt for an SBI cumulative deposit, on maturity you would get a credit for the principal and interest earned net of TDS. Calculate the RD maturity amount using the RD calculator.
In case the interest earned by you across all your recurring deposits across all branches of SBI in a year exceeds 10,000, the bank must deduct TDS at 10.3%. In case your IT PAN is not updated in the SBI records, it must deduct twice the TDS at 20.6%. So, do remember to update your PAN on your RD.
We aren’t done yet. This was only the TDS. Now, you would need to add the interest income on all your SBI RD’s and other RD’s to your taxable income for the year. Based upon your tax bracket, income tax is payable on this income. You must estimate the interest income and all your other incomes and, based on this, pay advance tax on advance tax payment dates (15th Sep, 15th Dec, 15th March and 31st March).
SBI will also issue you a Form 16A giving details of tax deducted on RD interest and tax deposited by it with government treasury. The TDS amount deposited by the bank with the Income Tax Department can be verified in your 26AS statement available online on the IT department website or through your net banking account. You can claim credit for the TDS amount in your annual Income Tax Return.
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