When is Income Tax deducted at source from interest?
If the estimated annual interest paid/credited or likely to be credited/paid on the deposit/s exceeds or is likely to exceed Rs.5000/- during the financial year, it is obligatory on the part of the deductor of tax to deduct Income Tax at source.
However, to avoid such deduction of tax, the investors can furnish self-declaration in Form 15G/H or by submitting the exemption certificate from the perspective Income Tax Authority for every financial year.