Tax: TDS on interest from bank deposits

Source: ET-Wealth-24Jan2011: Smart Things to Know: TDS on Interest from Bank Deposits   1.    Interest earned on bank deposits is subject to tax deducted at source (TDS) if the total interest amount in a financial year exceeds Rs 10,000. 2.    Interest earned on term deposits is subject to TDS. However, interest earned on savings account balances is not subjected to TDS. 3.    Even if a customer has multiple deposits, the interest earned will be aggregated and subjected to TDS if the threshold level is crossed. 4.    TDS is applicable on the entire interest income if it is more than Rs 10,000 in a financial year, and not on the extent to which the interest income exceeds Rs 10,000  5.    TDS is deducted at a rate of 10% for all categories of depositors except non-resident ordinary accounts where the applicable rate is 30.9% (inclusive of a 3% education cess) 6.    It is compulsory to register the PAN. If a term deposit accrues interest and the PAN is not known, TDS will be deducted by the bank at a higher rate of 20%