Top 6 Rules for TDS on Fixed Deposit

April 25, 2009


Earlier I have written one detailed article about How to avoid TDS on Fixed Deposit?. That article gets lot of attention and readers started asking many questions related to TDS and fixed deposit. I felt that I have missed few points in that article it is better to write another article which summarizes the important points related to TDS and Fixed Deposit. This article will give you more idea on the same topic.


In the recent announcement, RBI has made it compulsory to submit the PAN number for the fixed deposit to avoid TDS. If you are failing to submit the PAN, then bank will cut the 20% as the TDS amount. They will not consider the Form 15G and Form 15H submission.

If you have any questions please post it in the comments section. Subscribe to our future articles here. Please join us in the face book fans page to write your comments.

1. Tax Deduction at Source(TDS)

If you have fixed deposit in the nationalized bank or corporate, then interest income from the deposit amount is taxable and 10% will be deducted at the source. This process is called as Tax Deduction at Source(TDS). TDS is not only for the fixed deposit, it also applicable for the salaried employees and various other categories.

also read:

2. Deposit in different branches

Interest income is calculated based on the branch, if you have FD in the bank, up to Rs.10000 interest income in that branch  is not taxable and Rs.5000 in case of corporate FD like Tata Motors or Mahindra Finance. So, financiers advise customers to split the amount deposit in the different branches to avoid TDS.

3. Form 15H

If you are senior citizen(above 65) and your income is below the taxable income, then you can submit Form 15H to the bank branches to fully exempt from the tax. Note that if you are not submitting the forms, the tax will be deducted and you have get it through filing the tax returns. That normally takes another one year to refund the amount you paid as the tax. A fresh Form 15H needs to be furnished for each deposit that is placed with the Bank

4. Form 15G

If you are age is below 65 and your income is below the taxable income, then you can submit Form 15G to the bank branches to fully exempt from the tax. Note that if you are not submitting the forms, the tax will be deducted and you have get it through filing the tax returns. That normally takes another one year to refund the amount you paid as the tax.

5. Interest Income for Minor

Deposits held by minors are also subject to TDS. The credit for the TDS can be claimed by the person in whose hands the minor’s income is included.

6. Joint account with Senior citizen

A non-senior citizen can open a joint account with senior citizen. In that case senior citizen must be the first account holder and they can get the prevail interest rates applicable to senior citizen.


I hope this article would be very useful to understand the TDS process and how to handle the different scenarios. If you have any doubts, please post it in the comments section.

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120 Responses to “Top 6 Rules for TDS on Fixed Deposit”

  1. Rahul Says:

    Dear krishnas, My Dad wants to buy a car worth 5,75,000 and he is a govt employee. We have paid 50K as down payment. His credit track is not good and bank suggested to get an auto loan against FD. I suggested my father to get a 5 years FD for the remaining balance of 5,25,000 and get a loan for 5 years. But my Dad does not want to do that as he believe that this may cause Income Tax issues or inquiry. My Dad’s service is left for only 2 years but the FD and loan would still be for 5 years. Instead he wants to get FD for 2,50,000 and pay rest as cash. What is your recommendation?


  2. Rahul Says:

    Continuition to my previous comment—Also, please be advised that entire amount is given to him by my brother from his salary account.


  3. kauleshwar kumar Says:

    My father age is 50 year old .He want to put 40lacs FD in same branch (SBI) .Can he get from 15 G benefit ? he has no any other sources. kidndly advise me how to avoid TDS.


  4. kauleshwar kumar Says:

    My father age is 60 year old. he want to put 40lacs FD in same Branch. can he get from 15G benefit. he has no any other resource.
    kindly advise me how to avoid TDS.


  5. deepak Says:

    Hi Krishna,
    I have two FD one is of 10k and another is of 30k in HDFC bank
    in two different branch.
    I also have some amount in my saving account in same branch as my 30k FD.
    will TDS be deducted on my saving account amount also?


  6. krishnas Says:

    Hello Deepak,

    The above reply is wrong..there is no TDS for the Savings Bank account. Only Fixed Deposit TDS allowed.

    Hope this clears your doubts.



  7. Amit Says:

    Hi Krishna

    if we have to pay additional tax on interest income on bank fixed deposits, after tds has been deducted by bank (@ 10.3 %), while filing income tax returns if overall tax bracket is 30%?

    Thanks & Regards,
    Amit Arora


  8. krishnas Says:

    Hi Amit,

    You need not pay the additional tax for the Fixed Deposit interest income.



    • DEBASIS JANA Says:

      I think he has to pay the balance tax as this will be included as income from other sources and he is already in 30 % slab


  9. Amit Says:

    Dear Sir/ Madam

    I need to pay additional tax for Interest earned on Fixed Deposits in the bank.

    Already TDS has been deducted at the bank at the rate of (10% income tax + 0.3% education cess) , but as I fall under overall category of 30% income tax, I have to pay the additional taxes.

    I need to know which of the challans (CHALLAN NO./ITNS 280 or CHALLAN NO./ITNS 282) I have to fill for the same (additional tax for Interest earned on Fixed Deposits in the bank)

    1. CHALLAN NO./ITNS 280 – (payment of Income tax & Corporation Tax)
    2. CHALLAN NO./ITNS 282 – (payment of Security Transaction Tax, Hotel Receipts Tax, Estate Duty, Interest Tax, Wealth Tax, Expenditure Tax /Other direct taxes & Gift tax)

    Please assist.

    Thanks & Regards,

    Amit Arora


  10. uday hanmattekar Says:

    Interest on my all FDs in a bank branch during the f. year is below Rs 10000/-. Still the bank has deducted TDS. On asking them about this they explain that my Savings bank interest + FD interest exceeded Rs 10000/- during the f. year hence they have deducted TDS, only on the amount of total FD interest. Please confirm whether this is correct?


    • Debes, Bangalore Says:

      Savings Bank Interest is not at all considered for income tax purpose. Hence bank should not deduct TDS if FD interest does not cross Rs10,000/- mark in any financial year.


  11. mamatha kambley Says:

    Dear Sir,

    Iam a house wife and i have FD’s for which i get interest of Rs:1,67,000/yearly. Should i have to file my IT returns, as i don’t have any other income other than FD interest and iam just house wife. I have already filled form 15G with bank.



  12. Shrihari Says:

    Hello sir,
    i would like to know if the yearly interest of my FD is Rs 950000 what other deductions will be deducted other than mentioned in tax slab.
    i would also like to know is it a gud idea to sell my shares and invest the money in bank or company FD.

    Thanking You,


  13. Murali Says:

    Dear Sir,
    My wife deposited Rs 2 lakhs during March30,2007 in SBI. She had an FD certificate for Rs 2.91 lakhs as on March 31,2011. She submitted PAN no and also From 15H by Jan 2011. By April 2011, she got a shock when the bank deposited to her SB account Rs2.83 lakhs nearly Rs8000 less than the Maturity. The officer summarily rejected the fact that we submitted the PAN card copy / 15H. She also inicated we can file for returns. However today she delivered an Acknowledgement for INR 2000 only that too only for th eyear 2009-10. What should my wife do for recoverign INR8000 and Can we initiate any complaint against the bank


  14. AshwiniKumar Says:

    I am a salaried employee and tax gets deducted at source at office as I am above tax slab.I also have a few FDs for which no 15G is given and 10% TDS is applied by bank which I allow as I am already above tax slab.
    I am filing my IT returns for the tax income ONLY.Should I do anything for FDs too (like IT filing)?Kindly clarify and elaborate on anything to be done further.


  15. Annoymous Says:


    I have few 5 year FD’s that are 2-4 year old and I had never shown there interest in my taxable income. I was planning to pay tax on them on maturity.

    Few days back I checked my Form 26 AS and found that bank is already deducting 10% of tax on them since the year the FD’s were created.

    Please let me know how can I adjust the case. Do I need to pay remaining tax on them now or can I wait till maturity of FD and later on pay remaining tax on them?


  16. Surinder Raina Says:

    I have a 1000 days FD with State Bank of India, 1000 days ago. But after maturity the bank deducted TDS, even i had deposited 15H form with the bank. As I am not still qualify as senior citizen, but I have deposited 15H form, because I have filled 15G form but the Bank advised me to deposit 15H. But after that the Bank still deducted TDS.


  17. Sudhakar Says:

    I had a fixed deposit with SBI,after maturity Bank deducted tax (TDS) irrespective of filling Form No. 15 H.They said it is automatic.I asked them what is the use of Form No. 15 H,they do not have answer.I told them to make your computer programme such that tax will not be deducted in cases Form 15 H or 15 G is filled,but no sence prevailed upon them. Will you please try to make their senses alive.


  18. Saurabh Says:

    Dear All,

    One important question missing in whole discussion. Suppose i am in 20% tax slab. If i would get a TDS deduction on my FD then i need to show the interest earning at the the time of tax filing.
    Moreover as already 10% has been deducted on FD interst amount .Do i need to pay additional 10%?
    I hope my question is clear.



    • Vinay Says:

      Yes, You have to show your FD income while idealy filing form 16 and thus pay any additional tax liability above 10% which has already been deducted as TDS.


  19. dipti Says:

    if any person is taxable assesse dan also he can give 15h form just not to deduct tax.i m working in bank and most of time peple come and ask not to deduct tax and want to submitte 15h form dan wat should be done , please advice


  20. Pradip Says:

    Dear ,
    I am working in abrod and i want to open a account there so, which account is good NRE or NRO for invest like FD. Which account is not deduct any tax and give good return. And which type of Account I can handle from India and abrod ???


  21. bapi Says:

    hi. my income is not fixed and earned between 450000-600000 per anum.i didn’t make income tax file n i have deposited FD 100000 by spliting each 50 k in a nationalised bank and submitted 15 g to avoid tds.will i get further trouble from income tax dept for annual earned money????plz advice …..your reply will be highly appreciated ….


  22. Vivek Says:

    Hi Krishna.
    Thank you for this insightful article. It is very encouraging to see your personalized reply to every query! I have some basic doubts, please.

    TDS Rate: Is the rate of TDS [eg 10%] dependent on the income tax rate of the individual [slab rate]? If a person is in the 30% taxable slab as per his annual income, is he liable to pay 30% tds on the interest income or is it a flat 10%?

    Amount deductable: Is the incremental amount above 10000 taxable or the entire interest income? [eg. 15000 income from FDs, same branch]. Is 5000 applicable for TDS or 15000?

    Offsetting TDS deduction with ITR filing:
    Assuming an amount of 3000 has been deducted by way of TDS.
    How is this amount offset in one’s income tax filing? Is 3000 reduced from gross taxable income? Or is it reduced from interest income. How are avoiding double taxation on the interest income?

    Thanks a ton.


  23. vijayasree Says:

    I am 58 years old women, retired state govt employee. I received about 20 Lacs as GPF,PF etc. How can I invest these amounts in nationalised banks as FD’s and also to avoid TDS. Which forms do I need to submit annually.



  24. sagar Says:

    dear sir,
    my father retire last july and he got 14 lakh as grad+ppf and 23 lakh after tax deduction for vrs total amount is 37 lakh + he will recive another 13 lakh as arreal next year

    currently i deposit all his 37 lakh in hdfc fd’s in same branch kindly tell me how to save tax for my father


  25. Saurabh Says:

    Hello Vijaysree,

    Form 15H is applicable only for the person who is above 65 years old.
    so your case is with form 15G.
    Each time you will make a FD in same or different bank you have to fill a new form 15G.e.g. if you made 2 FD in SBI and 1 in HDFC then you need to fill three form 15G.
    But at the time of income tax filing you have to pay the tax as per applicable.You just have saved TDS to be deducted by bank. Definately it is good as it will be always less.
    Just a rough estimation you have 20lacs if you make a FD interst will be around 2lacs anually and for 1.8 lacs there is no tax for women.
    I would suggest to make FD with 3-4 banks preferably with SBI and other cooperation bank & submitt 15G for each FD.


  26. Anshuman Verma Says:

    Dear Sir,

    In order to avoid TDS on FD interest U have advised to split amount in FD in different branches. Is it possible to open multiple FD accounts in single branch and will that have the same impact?


  27. prakash Says:

    Hi Krishan Ji,

    1. What will be deduction in term of rupees as TDS if I earned an interest of 1100 rupees? Is it 10 rupees or 110 rupees. Provided TDS deduction rate is 10%.
    2. Suppose I have opened a saving account without my PAN and made a FD without PAN. If my annual interest is 9,900 rupees. In this case, is there is any deduction as TDS.
    3. I came to know through a bank person that now banks deduct TDS based on PAN keeping view of all branch in whole country. Suppose I have 4 different account in different 4 branch in same bank(say IDBI bank). I have earned 9,900 rupees from each 4 branch as interest as total interest sum of 39,600 rupees. Will the deduction on TDS will calculated on sum of interest(ie, 36,900 rupees) earned on all 4 branches or TDS calculated individually(interest of 9,900 rupees >> no TDS as less than 10,000).
    4. Suppose I have opened 4 different account in different bank (say in SBI, IDBI, PNB, HDFC) and earned interest of 9,900 from each bank annually summing up to 36,900 rupees. Will there be any deduction as same PAN? At the time of filling tax, do i need to show interest earned on each branch? Do the Income tax department collect information from all branches or all bank based on PAN.
    5. I am a regular salaried employee and my annual income is taxable. I pay tax each year on on PAN. Do I eligible to fill 15H form? evenif I filled the 15H form, do I need to show same while filling tax?
    7. Do you have any way out so that I can made multiple FD earning interest more than 10,000 without deduction of TDS.

    Looking for your valuable guidance.



  28. Saurabh Says:

    Dear Anshuman,

    It is not possible as in this case TDS will be deducted on the interest earned.
    Go for same bank but different brach.



  29. Saurabh Says:

    Hi Prakash,

    Let me try to answer your questions:

    1 – it is 10.3%. nominal 10% tax at source (TDS), plus 3% education cess on tax (in total 10.3%)
    2 – No as interest is<10k.
    3 – Need to confirm.
    4 – Definately TDS will not be deducted.Ideally you are suppose to show it at the time of income tax filing.Incometax dept. may collect information.Chances are 0.000000000001%.
    5 – 15H is only for Senior Citizens.Individuals below 65 years whose income is less than the taxable limit need to furnish Form 15G to be exempted from TDS.
    7 – Go for co operative banks.



  30. kartik chandra chatterjee Says:

    It is abetter experience for me.I am president of retired railway and central Govt.employees association/Bhilai.The association is having Bank Account with U.C.O Bank,charoda/Bhilai.Fixed deposit is there in the name of ASSOCIATION.The association is registered by chhattisgarh GOVT.Now the bank authority want to recover TDS against fixed deposit of the Retired employees association.Is it permissible?Pls.clarify.


  31. johnny Says:

    I am going to 60 in this may 2012 and Iam earning 300000 per annum can I submit 15H


  32. johnny Says:

    I am going to 60 in this may 2012 and earning 300000 per annum can I submit 15H in my bank to avoid TDS I am filing my ITR yearly.


  33. sony Says:

    I am a housewife, would like to invest an fd for 1 year, can i get the interest in monthly wise on my account? am i eligible for tds? i am having pan card. i dont have any other income sources. am expecting an answer through this.


  34. sankar Says:

    As you said, Interest earned on FD is taxable and TDS will be deducted.IF we submit PAN number then TDS wont be deducted.

    I just want to know for how much amount this TDS will not be deducted and I do not have to pay Tax on the Interests earned from FD ?

    Example is :
    Assume I save INR 25L in FDs in multple banks and multiples branches as you advised and provided PAN / Form 15G as indicated.
    But Do I have to pay any tax / TDS from the interests Earned ?

    I am little confused to save the investment of 1L INR per year in 1) PPF or 2) RD and then FD on maturity of RD for a period of 15 years to quate with PPF to see Option 2 as I said.

    Please let me know total return after 15 years from option1,2 Which I will get more ??



  35. Anil Mishra Says:

    My Mother (74) has FD’s worth Rs. 10 Lakhs in SBI. She does not have any other source of income. To avoid TDS she deposited form 15H & PAN details in the bank branch but in the month of April she discovered that TDS of Rs. 20,000 is deducted. On enquiry she was told that since the interest income is more than Rs. 50000 the TDS will be deducted even if the total income is less than taxable limit (even after depositing the form 15H!). I want to know that whether what bank authorities are saying is correct? What is the rule.


  36. Sankar Says:

    @Anil Mishra ,
    per me ,
    In your case they should not deduct the TDS if you submit 15H.
    Banks will deduct TDS even if you give form 15H only if the Interest in an year is more than Rs 1,80,000.
    Hope this info is helpful for you.
    Ask them the TDS certificate to get the return of the same deducted amount.

    – Sankar


  37. Manikanddan K V Says:

    What is the maximum interest income for which one can seek TDS exemption by submitting Form15G/15H


  38. T.Raghuvaran Says:

    Dear sir

    we wan to desided to put fd deposite this amount whit out income tax.please tell me as soon as possible.


  39. SATISH KUMAR Says:

    If i have done FD in july and interest on it is above 10,000 from this july to next july but less than 10,000 from this july to next 31 march then TDS will deduct or not


  40. K.K.Choudhary Says:

    Our Bank branch is having FD of Agricultural College where Income from FD is more than Rs.10,000.00 . Do we have to deduct Tax on FD at source.


    • krishnas Says:

      Hello Sir,

      Yes. You have to deduct the TDS of the income is excess of Rs.10000. There is no relation for the Agriculture FD to be excempt.



      • raj Says:

        hi Krishna if my f.d interest is 9500 and saving bank 1000
        so they il add both the interest and then they il deduct tax ..or only for fd


  41. Navdeep Says:

    Dear Sir,

    First of all I would like to say to you that all your articles are absolutely amazing for a comman lame man to understand all the terms.
    Sir, my query is that my wife who is homemaker is having FD for 5 lakhs under her name. Can she fill up 15G form.


  42. s.Thenmozhi Says:

    I am house wife,i get my father’s gift money,i want to know,can i deposit that money in to bank(Fixed deposits),having any rules and regulation.Please send the reply to my mail. Thankyou


    • krishnas Says:

      Hello Thenmozhi,

      If you are getting the gift, please prepare the gift deed. Also, if there is any income arising out of the gift, your father has to pay the tax for it.



  43. prathmesh Says:

    sir ,

    i want education loan so they have some document requirements ,and i am just 17 years old right now,,they said i used to have pan card ,,can i get pan card ??and if i can? then how can i aplly for it?


  44. krishnas Says:

    Hello prathmesh,

    If you are 17 years, then you are minor. Only your parents or guardians can do the bank transactions for you.

    You have to be 18 years to do the independent transactions. Also you can not get the PAN card when you are minor. Please talk to your parents.



  45. venkat Says:

    I have Fixed Deposit which earns interest less that 10,000 per year, but I have fixed for 10 years. While at the time of maturing the FD, how the Tax will be calculated. If I earn 10×9000= 90,000 towards (10 years) interest, will they calculate interest on 90,000 or no tax will be deducted as yearly income is less than 10,000 (assuming all the current Tax rules remain same).


  46. Tarun Says:

    Dear Krishna Ji

    I want to ask u something that i have a FD of Rs 2.5 lac for one year in hdfc bank . Bank is deducting 10% TDS & i have submitted PAN Number to bank. It started giving 5500/- Rupees per quarter in February month interest to me . i will got interest of fd for three time more. Should i pay any income tax on 5500/- in april 2012 . Please guide me .



    • krishnas Says:

      Hello Tarun,

      Are they deducting the TDS on your deposit. If they deducted the TDS, you need not pay the tax. If they have not deducted any TDS, interest income has to be added to the total income and pay he tax.



  47. L. K. Choudhry Says:

    According to the order of consumer forum the builder paid interest on the sum of Rs 9000/= due to me but the builder deducted TDS @ 10% on the amount of interest. I am senior citizen (aged 76 years ) and my income is below taxable limit.
    Please let me know if, under rules, he can deduct TDS or not



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