When you open a fixed deposit account in the bank, the interest paid for the deposit will be taxable income and the banker will deduct the tax at source and pay you the remaining income to your account. This process is called as Tax Deduction at Source(TDS). If you are liable to pay the taxes, you can not evade the taxes . But, there is cases where the TDS is not applicable but still the banks may cut the income from the source. It can be avoided if you act wisely and submit the required forms. This article intend to explore that in detail. If you have any doubts please post it in the comments section. You can subscribe to our future articles here.
TDS on Fixed Deposit
The following are the some important points on TDS on fixed deposit:
- Interest on fixed deposit is taxable and will be deductible from the source.
- If the total interest amount of up to Rs.10000 is not taxable.
- If the total amount exceeds Rs.10000, 10% will be deducted as the tax. If you have not submitted the PAN number while opening the fixed deposit, 20% would be deducted as the TDS
- Tax liability for TDS purpose is determined at branch level. So, it is advisable to split the deposits into different branches and cut the tax rate. You can read top 5 fixed deposit rules.
Form 15H (download)
You can submit the form 15h, if the person is above 60 to avoid the TDS. You should know that only a person of 60 years or more is eligible to file Form 15 H.
Form 15G (download)
This form is for the age below 60. For example, Mrs. X earns Rs.25000 from the interest in a year. She doesn’t have any other income and housewife. She is eligible to file the form 15g and give it to the bank before March 31st. The tax will not be deducted from the source. There is no need to get the approval from income tax officers.
- One important point is that, these forms has to be submitted each financial year to avoid the tax deduction. It is advisable to submit in the beginning of the year.
- Where as for NRI’s who earn interest on their NRO’s account are subject to 30% TDS .
also read:
Summary
In this article I have written about the form 15h and form 15g to avoid the tax deduction at source. This might be useful for saving the tax by splitting you deposit money into other senior citizens in your family. This is time to think if you have plan to open a fixed deposit account. Thank you for reading the article!!! If you have any doubts please post it in the comments section.
You can subscribe to our future articles here.
August 21, 2011 at 7:48 pm
Hi,
Greetings.
Iam 35 yrs of age and have made a FD for Rs 50,000 (Savings from Salary) in OBC @ 9.60% p.a for 1yr & 9 mths. On maturity the amount would be 59,030.
I would like to know whether TDS would be deducted and if, how much.
To avoid this, should I submit Form 15G.
Required your valuable suggestions be sent to my E Mail Id vanraju@gmail.com and Thank You.
August 5, 2012 at 7:31 pm
only if interest exceeds Rs. 10,000
August 24, 2011 at 1:41 am
Im a non Indian working in India im having trouble getting a pan
card. I have an account with HDFC bank if i deposit a check of more than 150,000 into my account. What is the problem i will have with tax
September 3, 2011 at 9:11 am
Hi Krishna,
My father is now 66 years of has now 12 lakhs to keep in an FD for 4 years at the rate of 10%. My questions are:
1) The interest that he will get after 4 years is around Rs 556000. Suppose in order to avoid the TDS completely, should he submit form 15H? Should he submit it each year?
2) If he do not submit form 15H, how much tax will be deducted at the end of maturity and what is the amount that he will get?
So can you please clarify as to which is the correct method, so that TDS is not deducted from the FD? Awaiting your reply.
Thanks
Praveen Kumar
September 11, 2011 at 8:35 am
i am a housewife ….may i kno if i take shares of SBI am i subject to tax deduction?
thnk u fr ur help
September 18, 2011 at 3:00 am
hi,
i am rekha-unmarried.my dad is into business n i help him in accounts.i personally do not pay tax n i have few FD’s in different banks which altogether earn more than 10,000/- pa .N in future if i have to avail loan benefit from my bank what steps should i take now.
September 26, 2011 at 12:32 am
Whether TDS on FD interest can be paid by the balance in SB A/C to avoid the accrual loss.
October 1, 2011 at 12:23 am
Dear sir,
I am salaried person and taxpayer in 30% tax slab and recently I opened one FD with bank which earned interest above Rs. 10000 and bank will deducted TDS @10%. My question is when filing the I.tax return, does I will have to pay 20% more tax on my interest income as I am already in 30% tax slab? How I will declare this interest income and tds certificate in my income tax return.?
October 4, 2011 at 5:32 pm
dear sir
my father and mother are invest in SBI fixed diposit in joint account and earn 119965=00 Rs. in a year my father is retired before one year(60 year old) and this mony is PF mony. We are submitted FORM 15H on branch but when maturity given bank pay only 95000=00 Rs. Because TDS is Deducted.
sir please help me this is right or Wrong Deduction.
Thanks
October 6, 2011 at 2:35 am
Sir
My Fd interest happened to be more than rs 10000 pa and so for the first 2 qtr of the financial year the tds got deducted as i had not submitted my 15 g form , which i had submitted previous financial year.
So my doubt is that if i submit my 15 g now will i be able to get my deducted tds fund back.
Please advise me Sir.
thank and regards
Regin M
October 11, 2011 at 9:06 am
Sir,
I would like to know if there is any bank giving monthly compounded interest on fd.
Thanks
October 19, 2011 at 11:45 pm
Hello,
I have query about for 15G.
I am housewife since last year previously i was working and paying tax.I have generated some FD’s online in ICICI bank whose interest is crossing RS.10,000.So i want to know how can i avoid TDS.Whether filling form 15G for each branch will do?
Another question about deduction of TDS.Will TDS gets deducted even if owned FD’s generate interets less then 10K in respective branch
October 22, 2011 at 3:27 am
Instead of having 5L in a single FD in a single bank, I have taken FDs worth 1L in 5 different banks (NOT branches of same bank) for less than 1 year, so that interest earned is less than 10K.
I assume TDS is not deducted by all those banks. I also assume I do not need to file returns (as it is not made aware to IT dept) for the interest earned through the 5 banks on the FDs.
Please clarify my understanding. I thought I am saving whereas I hear it is not so. If it is not the case, I would prefer to have all my FDs in a few banks as there is no advantage in depositing in various banks. Pls enlighten me as I am very confused.
August 7, 2012 at 4:19 am
It is tracking by your PAN number. Thus, there is no benefit to having FDs in different banks.
October 23, 2011 at 11:05 pm
Sir,
i have FD’s in SBI for various amounts. is there any LIMIT for the amount fixed, subject to getting tax exempted by submitting form 15G.
October 30, 2011 at 11:52 pm
A FRIEND OF MY RECEIVED 7 LAKHS CHEQUE AFTER HER HUSBANDS DEATH. IF SHE DEPOSITED THE CHEQUE WILL SHE HAVE TO PAY TAX ON IT. HE HAS PURCHASED A FLAT ON LOAN. WHE WOULD LIKE TO PAY THAT SEVEN LAKH TO THE BANK WHICH HAS PAID FOR HER HOUSING LOAN.
November 11, 2011 at 2:01 pm
I am a student of class 12th and my mother is a family pensioneer.
please suggest us any monthly source of income with higher yields
and ways to save tax.
I have tried sweep in savings account so that I could take out money immediately in case of any emergencies.
But please tell me if interest is calculated monthly or yearly
and what if I withdraw 50% of total amount in fd after 3 months off opening the account:how much interest will i get then.
November 16, 2011 at 1:19 am
Hello sir,
my father occupation is farming and my mother is a housewife. government has just acquired our land and in lieu of that we have been paid Rs 52 lacs. We are planning to invest some amount in FD.i found this post very useful and i thank you from the bottom of my heart for hosting such a wonderful site.
I still have some queries regarding fixed deposite scheme:
1. What is the max. earned interest that can be exempted frm tax deduction in current fiscal? 2. Is there any special tax exemption given to farmers? 3. As i mentioned my father is a farmer. Is he eligible to fill 15g form?
Please leave a reply to above cited queries..any other personal advice of yours will be highly appreciated. Thanks
November 22, 2011 at 11:48 pm
If my interest amount on FD is Rs.10300,then TDS which is 10% will be on total amount or on Rs.300 only?
April 2, 2012 at 3:01 am
The TDS will be on Rs.10300/-
November 25, 2011 at 8:21 am
HI All,
If you have not submitted the PAN number while opening the fixed deposit, 20% would be deducted as the TDS.
Make sure that your PAN number is updated.
Thanks,
Krishna
November 29, 2011 at 10:54 pm
Hello Sir,
I understand that Form 15G is applicable if your total interest income is less than the taxable range.
However, currently there’s no tax if one’s total taxable income is less than Rs. 1,80,000. Is the same applicable for FD Interests as well?
For example, if I don’t have any other source of income. And my income from FD interest is Rs. 1,50,000. Will submitting 15G make that interest non-taxable? Or is the interest limit capped at Rs. 1,00,000 only
Thanks,
Samudra
November 30, 2011 at 12:29 am
Dear Sir
My wife has a FD of Rs. 4.0 Lac in SBI. she forgot to deposit form 15G and bank deducted an amount of 9800/- as TDS. Recently we visited the branch and come to know the fact. Bank advised us to file income tax return, saying that deducted amount may be back to us by IT dept.
She is a school teacher and her income is not in taxable slab, she has a PAN Number but we did not submit it to the bank at the time of opening the account because somebody told us at that time that if we did not submit PAN TDS will not be deducted, but it has happened.
I want to know-
1. Is it good to submit PAN Number to Bank.
2. Can we submit it right now?
3. which ITR form we should use to file income tax return?
4. should we attach TDS certificate issued by bank with ITR.
December 5, 2011 at 11:33 pm
Dear Sir,
we are an ngo running a workshop for the mentally challanged young adults. to avoid tds cutting in bank which form is applicable for us.
December 6, 2011 at 9:23 am
Hello there, You’ve performed an excellent job. I will certainly digg it and individually suggest to my friends. I am confident they’ll be benefited from this web site.
December 10, 2011 at 5:00 am
Dear Sir,
I am going to retire on 31.12.2011 and will have Rs 20 Lacs in cash.
I have no other source of income.On interest on fixed deposits banks will deduct TDS.If I submitt Form-15G can I avoid TDS.Will bank agree not to deduct TDS.
Pl inform
Seshasai PV
December 12, 2011 at 1:01 am
hello sir
iam a student i want to open fixed deposit account and iam having my pan card, please suggest me an appropriate bank and to prevent tds deduction
December 12, 2011 at 11:45 am
Hi krishnaji,
i am salaried person. if i give all my money to my mother’s account and open an fd there. will this income come under tax. my mother has no income.
December 26, 2011 at 12:43 am
Sir, My father have a FD for Rs.50000. after 4 years he got Rs.70000 (approx) including interest. His age is 62. I want to know is this interest is taxable? is he need to take PAN card for renew or withdraw the FD threw his SB account?
December 26, 2011 at 9:00 pm
Dear sir ,
Youi mention that a senior citizen is one who attained age of 65 yeras but banks consider a senior citizen at the age of 60 years . Please clarify .
Manoj
December 30, 2011 at 12:38 pm
Hi Krishna
I am an NRI (Canadian citizen with OCI / PIO card) living in Canada.
I understand that unlike NRO accounts, NRE savings and FD accounts are exempt from tax deduction and TDS .
Since Dec 24th, 2011, HDFC Bank has started offering upto 9% interest on NRE Fixed deposits. So for instance if I deposit say Rs 15 lacs for 1 year I can get 7% interest.
My question is that since this is much higher than what indian banks have traditionally paid (3.5%) and the interest accruing would be more than 1 lac per anum, will this interest income still be free of tax deduction /TDS ? can you suggest what I need to do to ensure that there is no TDS. Though i already have a NRE savings account with them they dont seem to have my PAN card details – is this required to be submitted to make sure there is zero deduction of tax/TDS. thanks
January 2, 2012 at 3:55 am
Hi Krishna
Article is good.
Still a lot of confusion with me.
my question is :-
If i a make an Fd which earns less than 10000 interest PA,So according to your article i got to know that there is no TDS.
if i declare that FD in IT returns Then should i pay the tax for the interest even though it is less than 10000.
(Ex if i make a FD 10000 with ROI 12% then for every year i earn an interest of 1200 suppose then should i pay tax to 1200 at the time of IT declaration).
When i check my returns in my slip below are the few points i saw… asking for a deposit not less than 5 years…then i didnt get what exactly it is meant for.
Can you please explain me in this regard
These are the points i saw in my IT slip
A) For a fixed period of not less than 5 years with a scheduled bank
B) Which is in accordance with a scheme framed and notified, by the Central Government,
in the Official Gazette for the purpose of this clause.
Proof of Investment should be submitted.
I am a salaried person earning about 30k pm.
January 3, 2012 at 9:49 pm
Hi Krishna,
I am planning to invest in fixed deposit for the period of 10 Years. The amount I may got at the end of the 10th Year is 5,00,000. How much TDS amount deducted from my account at the end of the 10th year?
Thanks in advance
SIVA
January 10, 2012 at 7:41 pm
Hi Krishna,
15 G form is applicable for NRI, If they have not any income in previous year
January 12, 2012 at 2:29 am
Hi Krishna,
i m planning to invest 10 lac as fixed deposit for 1 year on my mothers name.So, i want to know how can i earn more. n please tell me about TDS i dont know anything.
My mother is a pensioner n she gets around 12000+mahagai bhatta. n she also hv fd in other banks. pls tell me how could i avoid or minimise tax..
or should i open recurring account?????? in which bank should i invest??
January 13, 2012 at 12:19 pm
Hi,
Quite useful article. I have some FD joint account in different banks, where I have kept my father’s name (he is above 70yrs of age) in first name to get sr. citizen benefit of higher interest. Now one of the bank deducted some amount against interest. When I inquired, they say, Form 15G is not submitted. Although I have submitted my father’s PAN card as well as my PAN. My question is how to get back that deducted money, should I need to submit the forms each financial year, do we need to have income return file for us?
Pls reply to my mail id.
Thanks & regards,
January 13, 2012 at 12:23 pm
Hi,
Quite useful article. I have some FD joint account in different banks, where I have kept my father’s name (he is above 70yrs of age) in first name to get sr. citizen benefit of higher interest. Now one of the bank deducted some amount against interest. When I inquired, they say, Form 15G is not submitted. Although I have submitted my father’s PAN card as well as my PAN. My question is how to get back that deducted money, should I need to submit the forms each financial year, do we need to have income return file for us?
btw, i am an NRI.
Pls reply to my mail id.
Thanks & regards,
January 19, 2012 at 1:54 pm
Hi Krishna,
just a quick doubt !!!
Assume i am getting overall rs15000 as interest , so in this case TDS would be deducted over 15000 or 5000 (exceeding amount) ????
January 31, 2012 at 1:05 pm
Hi Krishna,
I read here lots of queries and their relevant solutions here. I need to know about NRO fixed deposit. I got 10L from my parents as they sold their house and i put them in axis bank as a FD for 2 years in 2010 jan. Now on maturity they deduct almost 33% from my interest. Total interst was 150000 and they deduct 50000.
Now what to do ? How i can take this money back ? Also they again put my FD for next 2 years and i dnt have any FD copy for this as i am in canada. That was my part from my parent for my life. i was not on work, why they charge i really dnt know. Kindly suggest me.
Sincerely
rakesh
February 20, 2012 at 10:06 pm
how to avoid tax on an annual indian income of INR 4,00,000/- of a state government emplyee/teacher (46 yars old lady)through government and public infrastructure investments?
February 25, 2012 at 4:20 am
Hi
My mom ( house wife) has some FD in a nationalised bank.
Last Year they have deducted TDS and gave us a TDS Cetrificate.
Please tell me how to get TDS refund and which form we have to submit.
Thanks
regards
Samir
February 25, 2012 at 8:15 am
Hi,
I’m new in the field of investments and so have my mind totally confused. Would request you to help me understand this. I have made a FD of Rs.50,000/- for a tenure of 5 years. Interest rate that bank provides is 9.25%. the interest that i earn on this sum is 10,000/-. In that case, is TDS applicable for the first two years when the interest earned is < 10,000/-?? Do i have to submit Form 15G for these two years?? I'm employed and don't have any income from interest earned other than this. Im confused on the matter of how the tax is calculated on the interest and how i can save this amount deducted as TDS on interest. Can you please clear me with what happens with this sum of 50,000 each year – like how much interest i get, at which year it becomes liable of TDS, how is Tax on interest calculated, What is the amount i get at the end of the tenure of 5 years?
Thanks,
zamani.
February 25, 2012 at 8:19 am
Correction – “the interest that i earn on this sum is 10,000/-” can be neglected and instead “the interest that i earn on this sum is 10,000/-.” could be please taken in its place.
Thanks,
zamani.
February 25, 2012 at 8:21 am
Hi,
Correction – “the interest that i earn on this sum is 10,000/-” can be neglected and instead “the interest that i earn on this sum is less than 5000 rupees for the first year and exceeds 10,000/- after 3 years.” could be please taken in its place.
Thanks,
Zamani.
March 27, 2012 at 11:00 pm
HI, TODAY IS MARCH 28, MY FD MATURED ON MARCH 27, AND 20% TDS GOT DEDUCTED. BANKER IMMEDIATELY TOOK MY PAN CARD AND TOLD TO COME ON MAY SO THAT SHE COULD ISSUE ME TDS CERTIFICATE ( WHICH I WOULD NEED TO FILE IT RETURNS AND GET MY DEDUCTED TDS ) AND FORM 15G SO THAT NO TDS IS DEDUCTED FOR FUTURE. PLEASE SUGGEST ME:
1) HOW MUCH TIME DOES IT TAKES TO UPDATE PAN DETAILS, CANT I IMMEDIATELY FILL THE 15G FORM AS IT SHOULD BE SUBMITTED BEFORE MARCH 31ST.
2) WILL I BE ABLE TO GET MY DEDUCTED TDS BY FILING IT RETURN, IF YES, BY WHEN?
THANKS
NIRAJ
April 6, 2012 at 11:30 pm
sandeep kumar
my mother is 45 year old she have two FD in UNITED BANK OF INDIA ,RS.100000 for 5 year @6% and after matuirity same FD renewal for 2 year @8% again after matuirity same FD renewal for 3 year @7.75% matuirity date of this FD 7-11-13,both FD matuirity AMOUNT is 416000 (approx) and assesment year 2013 -2014.
I am every year month of april summit form 15H.
Please tel me now this amount is under TDS deduction. If yes , tel me how can avoid from TDS.
Thanks.
April 12, 2012 at 6:28 pm
Dear Sir, I am aged 60+ and not assessed to Income Tax. My income including interest on Bank deposits is well within the exemption limit. Even after submission of Form 15 H bank has deducted TDS on my interest on Fixed deposit.Let me enlightened whether the bank is empoweredto make TDS unmindful of submission of Form 15-H well before commencement of the Assessment year.If Bank’s position is correct meaning of subm,ission of Form 15-H will be meaningless. Please clarify
May 30, 2012 at 9:33 pm
Dear Gurumoorthy,
As per your query I think there are two things which might be affected in your case, first bank has forgot take exemption of 15H by entering in their system or 15H was rejected by bank in case of interest income is crossing taxable limit
if first case is applicable then intimate bank about mistake and also reverse tds amount but if tds already deducted and deposited you have only option to get these amount by filing IT return and claim refund for the same
next time be careful for submitting 15H in time
May 30, 2012 at 11:39 pm
Hello Gurumoorthy.V,
Murtaza Bhagat said it perfectly. There are some occasions when banks does the mistake of not submitting the forms. This affect your TDS deductions.
Thanks,
Krishna
April 13, 2012 at 4:52 am
Thanks for the interesting post! Turns out to be very useful concerning the matter of finance)) Hope to read more interesting info here;)
June 6, 2012 at 12:26 am
Very Good article.
Must include information if PAN card number is not updated in bank account and Tax deducted, then what we need to do to get TDS certificate Form16 from bank?
July 19, 2012 at 1:49 am
QUESTION: Do I need to submit my Permanent Account Number (PAN) to the Bank?
ANSWER: From April 1, 2010 Permanent Account Number (PAN) shall be mandatory for Non-Resident Indians to avail benefit of lower tax deduction under Double Taxation Avoidance Agreement (DTAA) treaty. Hence it is advisable to submit your PAN to the Bank.
Please note that it is also essential to update your PAN number with the bank for repatriating funds from NRO account as well as getting tax credit in your tax pass book for TDS deducted on your NRO accounts.
August 3, 2012 at 6:05 am
Good question. . .ugg outlet usa and one that everyone should ask. Reply
August 6, 2012 at 5:56 pm
i am a student and i have deposited 3.5lakhs in fixed deposit in SBI will i have pay tax?
August 6, 2012 at 6:00 pm
i am a student and i have deposited 3.5lakhs in fixed deposit in SBI will i have pay tax? will the tax be debited from my intrest ?
August 6, 2012 at 9:17 pm
Hello Haree,
If the total interest is below Rs. 10000, need not pay the taxes.
Thanks,
Krishna