While filing Income Tax Returns for any particular financial year you are supposed to show incomes received from all the possible heads which include interest received from Bank Deposits. Such interest incomes are subjects to TDS at a rate of 10% along with applicable cess if it crosses a minimum threshold limit of Rs. 10,000. While computing total income and required tax liabilities you need to know how much exact interest income has been received and what is amount of TDS has been deducted by banks respectively. Basis that you may claim the deducted tax as refund in case you fall under lower tax bracket as whole or you need to pay additional tax if overall liability is higher than deducted tax. It is always recommended to submit Form 15G or Form 15H if your annual estimated income is below taxable limit to avoid TDS.
As per Income Tax Act/Rules Form 16A (TDS Certificate) is required to be issued with in 15 days from due date for quarterly TDS return. But it has been noticed, many a time Banks (not all banks) do not issue TDS Certificate to their depositors, which happens only upon request raised by depositors and this causes inconvenience to customers in filing income tax returns timely. Reserve bank of India directed banks to issue form 16A on time to the customers. This is the proof of TDS deduction and assessee (tax payers) can file their return claiming refund if their total earnings below threshold limit. If not, still Form 16A is very important paper for filing income tax return.
The matter has been examined and with a view to protect interest of the depositors and for rendering better customer service, banks are advised to provide to their customers from whose income tax has been deducted at source, TDS Certificate in Form 16A. Banks are advised to put in place systems that will enable them to provide Form 16A to the customers within the time-frame prescribed under the Income Tax Rules. Banks should avoid waiting till the last moment.
This advice is issued under Section 36 (1) (a) of the Banking Regulation Act, 1949 (10 of 1949).
Find below notification RBI/2013-14/361 DBOD.No.Leg.BC.65/09.07.005/2013-14