I shall retire next month and expect a pension of Rs 40,000 a month. I also have investments in fixed deposits and receive interest income. Since tax at source will no longer get deducted from my salary (TDS), how should I pay tax on the pension and interest income?
Pension from the employer is taxable under the head of income from salaries and as such, tax withholding will take place on the same. Even the bank will deduct TDS of 10 per cent on the interest from fixed deposits where the interest amount exceeds Rs 10,000 during the relevant year. If any taxes still remain payable due to your other income or because you fall in a higher tax bracket but tax on fixed deposits has been deducted at 10 per cent etc. you may pay the balance at the time of filing the return. Where the tax due exceeds Rs 10,000, it's mandatory to pay taxes in advance by estimating your income for the full year as follows:
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15 per cent of tax to be paid before June 15
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45 per cent of tax to be paid before September 15
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75 per cent of taxes to be paid before December 15 and
- 100 per cent of taxes to be paid before March 15, 2017.
Kuldip Kumar, partner and leader, personal tax, PwC India, answers your questions
The views expressed are expert's own. Send your queries to yourmoney@bsmail.in
The views expressed are expert's own. Send your queries to yourmoney@bsmail.in