Is there a way to save tax on RD? Please tell me how to save tax on RD interest?
The first thing you should know is that you can save tax on RD only when your RD is opened in the post office.
If you have a recurring deposit account in a bank, you cannot save tax on the interest earned. The interest earned from your RD will be counted as income from other sources and hence is taxable as per the income tax laws.
Unless, you had an RD in the post office. In that case, you can claim deduction under section 80C of income tax (old regime) on the principal amount invested. Know that the interest earned via Recurring deposit will attract TDS deduction from the bank. If you submit your PAN details, the TDS will be deducted at 10% on the amount exceeding Rs. 10000. If you fail to submit your PAN details, TDS will be deducted at 20%.