I have 5 fixed deposits in multiple denominations ranging from Rs.2.5 Lakhs, Rs.4 Lakhs, Rs.5 Lakhs, 7 Lakhs & Rs.13 Lakhs for last 5 years.
All previous years , TDS @10% was being deducted from interest earned in respective account & balance amount re-invested. In Jun’19 , HDFC bank has not deducted TDS from any of 5 fixed deposits & have re-invested principle & interest earned in respective renewed Fixed deposits.
However, the TDS from the 5 fixed deposit has been debited to my linked Savings bank account without taking my consent / approval. On querying with HDFC bank, their response is “TDS will recovered from linked /savings account when the TDS to be recovered is higher than interest payable.” . This situation doesn’t at all when TDS is deducted from respective fixed account unless HDFC bank combines TDS of all fixed deposits.
This affects account holder in multiple ways – (1) cashflows go off- track as other payments ( Utility bills, MF SIP etc ) instructions are mapped to SB account (2) Penalty levied for Non-maintenance of minimum balance in SB account (3) Credit score is tarnished thereby financial institutions get to charge higher interest on any loans etc.
I want HDFC bank to reverse the TDS made at aggregate level & recover TDS from interest against respective fixed deposit account.
However HDFC bank is refusing & taking shelter of income tax rule to not correct the transaction by giving the statement as ” We would like to let you know that RBI states that TDS should be apportioned to respective Deposits and should not be recovered from a single deposit.TDS is governed by Central Board for Direct Taxes (CBDT), however it does not specify the mode of recovery. ”
Is there a section / clause that specifies that TDS has to be debited from respective account only & not from any another account ? Your advise will be of immense help .
Thanks & best regards
How can a 10% TDS on interest whether it is Rs.100 or Rs.1 lakh interest be more than the 90% of the remaining interest they pay? I am sensing that they did the mistake of not doing the TDS from the interest part. To correct the same, they debited it from your account. This is completely unfair.
Raise an issue with Banking Ombudsman immediately.
Yes I plan to raise / escalate the matter to next higher level.
Before that I want to know if there any section in direct tax and / or Income tax where it mentions that TDS has to be from the interest earned from deposit & not from any other deposit . This can make the case the strong even at higher level