• Double charging of TDS for bank FD a/c (cumulative interest mode)

Sir,
Will you kindly help this old retired man  by supplying the relevant circulars of CBDT on tds deduction by banks for fixed deposit a/cs on cumulative interest mode
my question 
whether for a fixed deposit a/c (cumulative interest mode) in which  yearly accrued interest is shown and tds thereby is yearly deducted by bank and also interest and related tds is shown by customer while filing income tax returns.but again at the time of maturity bank is deducting tds on the maturity amount.whether this is proper .even highest officials of bank are not replying to my question

the tds charged on yearly basis are  listed below.please be kind enough to opine in view of the fact a total tds of rs 4956 was deducted on accrual basis as described in case history.thus a total tds of rs 5992(charged at the time of maturity)+rs 4956= rs 10948 was deducted.actually total interest  paid is maturity amount of rs 152279-rs 100000=rs 52279.10 or 10.3%(maxm) is rs 5385.therefore total tds charged for an interest amount of rs 52279 is rs 10948(how ?).i have submitted a valid permanent account number card (pan) to the bank.
 
 case history   

please note that originally i have made a fd a/c at  sbi branch,lake town,kolkata with a sum of rs 100000 on 25/05/2009, maturity date-25/05/2014 with rate of interest 8.5%.(cumulative interest basis).maturity value was rs 152279.after this a/c got matured on 25/05/2014 i renewed it for 2 years 11 months with interest payment on quarterly basis at a roi of 9.25% with a base value of 146287.as per bank officials then tds of an amount of rs 152279 minus rs 146287 =rs 5992 was then deducted),
it may be kindly noted as follows.
interest accrued and tds deducted for the said a/c for five years before maturity for the mentioned a/c is detailed below 
year           interest accrued                    tds deducted 
2009-10       rs 7402                                   rs 741 
2010-11        rs 9369                                   rs 937 
2011-12        rs 10130                                 rs 1013 
2012-13        rs 10894                                rs 1090 
2013-14        rs 11774                                  rs 1175 
total interest=rs 49569      total tds=rs 4956(a)
 year 2013-14 means up to 31/03/2014.however fd a/c matured on 25/05/14 .original invested amount was rs 100000.maturity amount was rs 152279.total interest of rs 52279 was paid for this a/c.considering 10.3% tax tds(bank norms of 10%tds) should be rs 52279 x 10.3%=rs 5385(b) of which a total tds of rs 4956 was periodically deposited to it dept by bank(as shown above)in 5 years.in addition at the time of maturity a further sum of rs 5992 was deducted as tds,which means a total tds of rs 5992+rs 4956= rs 10948 was deducted.actually tds deducted at the time of maturity should be (b)-(a)ie rs 5385-rs 4955=rs 430 only
                


main points that have been raised by me

1)under section 194a of the income-tax act. it is natural that banks will deduct tax on accrual basis. but  if they again  deduct at the time of maturity, then it is wrong.  if there is deduction at the time of accrual, only the left over portion is deducted at maturity.this is true when for maturity  fd rolls over into the next year. bank cannot deduct more than 10% tds overall.

2)banks provide for interst annually as accrued and deposit the tds annually on the basis of interest given.this interest is not actually paid yearly  to the customer.in this particular case apart from yearly deducting tds  they also levied tds at the time of maturity on maturity amount(even more) and the amount given on maturity is less than what it should be.actually it is a case of double tds charged

3)banks deduct tds on interest income when it is accrued and not when the fd matures.so if we have a fd for 3 years – banks shall deduct tds at the end of each year on the basis of acrued interest

4)interest on fixed deposits are calculated annually or on a cumulative basis. however, the same fd is taxed on an accrual basis,althoughthis interest is not actually paid yearly  to the customer . thus, the timeline on reception of the interest on  fd isn’t a factor for tax to be imposed upon it. we will have to pay the corresponding tax at the end of the financial year, and even in situations when the interest isn’t taxable, it must be displayed on our it returns.

5)tds deduction is mandatory but maximum deduction is 10%.

therefore conclusion should be  during maturity no further tds should be deducted except for the left over portion is deducted at maturity.this is true when for maturity  fd rolls over into the next year(after march )

                 in this particular case a fd a/c was opened at  one sbi branch.apart from regularly deducting tds on accrual basis,again have imposed tds on total maturity value.

please opine