Fixed deposit is one of the most desirable investment tool available in India. The tool can be used strategically to obtain the highest possible returns along with highest principal safety. However, you have to plan your investment properly in order to make the most out of your investment. For instance, not many know that returns from FD are taxable if the interest income exceeds a certain figure. In case of regular individuals below 60, the TDS deduction threshold is set at Rs 10, 000 per year. However, after the Union Budget 2018-19, the TDS deduction threshold in case of senior citizen FD scheme is capped at Rs 50, 000 every year. Given that, no matter which FD scheme you are investing in, you have to plan it properly.


FD investment, if not done in a calculated manner, you might lose a significant part of the returns from FD as TDS deduction.

  • 10% of the interest income if it exceeds the threshold, and if the financial institution has your PAN details.
  • 20% of the interest income if the PAN details are not available with the financial institution.

What is TDS?


TDS or Tax Deduction at Source. As the name suggests, it is the tax deducted at the source from where the income is received. By law, any bank or NBFC is liable to deduct the applicable percentage (set at 10% and 20% in case PAN details are missing) income tax on interest income from the deposit and submit the same to the government account.


How can a person claim the TDS deduction if they are not liable for it?


  • Submit your PAN details to the financial institution.
  • Secondly, if the person’s gross annual income is less than the taxable limit, they can claim the amount deducted as TDS while filing their ITR. The same would require you to submit form 15G or 15H; whichever applies in your case.

On a concluding note, monitor 26AS. Form 26AS is the online facility provided by income tax department to track your tax payments. Any TDS with your PAN number is reflected in Form 26AS