Tax on FD Interest —
Slab Rate, TDS & Form 15G
How fixed-deposit and bank interest is taxed, the new Budget-2025 TDS thresholds, when to file Form 15G / 15H, the 80TTA and 80TTB deductions, and how dividend and gift income are taxed too.
FD interest is fully taxable as "Income from Other Sources" at your normal slab rate — there is no special or concessional rate. Banks deduct TDS at 10% under Section 194A once interest from that bank crosses Rs 50,000 a year (Rs 1,00,000 for senior citizens, both raised in Budget 2025), or 20% if you have not given your PAN. Submit Form 15G (below 60) or Form 15H (60+) if your total income is below the taxable limit. Tax-saving FD principal gets 80C — but the interest is still taxed.
From 1 April 2025, the Section 194A TDS threshold on bank/FD interest rose from Rs 40,000 to Rs 50,000 for general depositors and from Rs 50,000 to Rs 1,00,000 for senior citizens. This only delays TDS — it does not make the interest tax-free. You still add the full interest to income and pay tax at your slab.
FD Interest Tax at Different Slabs
Assume Rs 60,000 of FD interest in FY 2025-26 with PAN provided, so the bank deducts TDS of 10% = Rs 6,000. Your final tax depends on your slab; TDS is only an advance you adjust in the ITR.
| Taxpayer | Slab on interest | Tax on Rs 60k | TDS deducted | Net position |
|---|---|---|---|---|
| Income below basic exemption | Nil | Rs 0 | Rs 6,000 | Refund Rs 6,000 |
| Salaried, ~Rs 7.5L income | 5% | Rs 3,000 | Rs 6,000 | Refund ~Rs 3,000 |
| Salaried, ~Rs 15L income | 15% | Rs 9,000 | Rs 6,000 | Pay Rs 3,000 more |
| Income above Rs 24L | 30% | Rs 18,000 | Rs 6,000 | Pay Rs 12,000 more |
Slabs shown are new-regime FY 2025-26. Add 4% cess to the tax. TDS is credited against your final liability — always claim it in the ITR.
FD interest must be declared on an accrual basis each financial year, even if the FD has not matured and you have not withdrawn anything. Reporting it only in the year of maturity is a common error that triggers notices. Cross-check your Form 26AS and AIS on the income-tax portal against your bank interest certificates before filing.
TDS on FD Interest — Rules & Rates
TDS is deducted when interest is credited (not only at maturity). The threshold is per bank, aggregating all branches where PAN is linked. NRO deposits follow Section 195, not 194A.
| Condition | General (below 60) | Senior citizen (60+) |
|---|---|---|
| TDS threshold per bank / year | Rs 50,000 | Rs 1,00,000 |
| TDS rate (PAN provided) | 10% | 10% |
| TDS rate (no / inoperative PAN) | 20% | 20% |
| Form to stop TDS | Form 15G | Form 15H |
| 80TTB deduction | No (80TTA Rs 10k on savings only) | Rs 50,000 (old regime) |
| NRO FD | 30%+ u/s 195 | 30%+ u/s 195 |
| NRE / FCNR FD | Exempt in India | Exempt in India |
Section 194A thresholds effective 1 April 2025 (Budget 2025). NRE/FCNR interest is exempt while you are a non-resident.
Got TDS deducted or a mismatch in your AIS? We reconcile it and file your return.
Get ITR Help →Form 15G / 15H & Reducing TDS
Form 15G (individuals below 60) and Form 15H (60 and above) are self-declarations telling the bank not to deduct TDS because your income is below the taxable limit. File them at the start of each financial year, at every bank and branch where you hold deposits.
- Give your PAN to the bank — cuts TDS from 20% to 10%
- Keep your PAN linked to Aadhaar (an inoperative PAN triggers 20% TDS)
- Submit Form 15G (below 60) if total income is below the exemption limit
- Submit Form 15H (60+) if your estimated final tax is nil
- Check Form 26AS & AIS each quarter for bank-reported interest
- Claim any TDS deducted as a credit in your ITR to get a refund
Form 15G/15H is a declaration that your income is below the taxable limit. Filing it falsely to dodge TDS is treated as a false declaration and can attract penalty/prosecution. If your income is taxable, let the bank deduct TDS and simply claim the credit when you file — the tax is due either way.
80TTA vs 80TTB — Interest Deductions
Two small deductions reduce tax on interest — but only under the old regime. The new (default) regime allows neither, so most interest income there is taxed in full.
Section 80TTA — below 60
- Up to Rs 10,000 deduction
- Only on savings-account interest
- FD / RD interest does NOT qualify
- Individuals & HUF, old regime only
Section 80TTB — senior citizens
- Up to Rs 50,000 deduction
- Covers FD, RD and savings interest
- Only for residents aged 60+
- Old regime only; replaces 80TTA for seniors
A senior citizen on the old regime can shelter up to Rs 50,000 of total interest income (FD + RD + savings) under 80TTB, and pairs it with the higher Rs 1 lakh Section 194A TDS threshold and Form 15H. On modest interest income this can bring the effective tax to nil.
Compare old vs new regime for your interest and salary income.
Use the Tax Calculator →Dividend, Gifts & Other Income
FD interest sits in the same "Income from Other Sources" head as several items people forget to report:
| Income | How it is taxed | TDS |
|---|---|---|
| Dividend (shares / MF) | Slab rate (since FY 2020-21) | 10% u/s 194 above Rs 10,000 |
| Savings-account interest | Slab rate | No TDS |
| Recurring deposit (RD) | Slab rate | 10% u/s 194A (same Rs 50k limit) |
| Gift from non-relative > Rs 50,000/yr | Fully taxable u/s 56(2)(x) | No TDS |
| Post-office / bond interest | Slab rate | Varies by instrument |
Dividend TDS threshold raised from Rs 5,000 to Rs 10,000 per company in Budget 2025 (w.e.f. 1 April 2025).
The Annual Information Statement pre-fills interest, dividend and mutual-fund data reported by banks and companies. If you under-report FD or dividend income, the mismatch is flagged automatically. Reconcile the AIS with your own records and report everything on an accrual basis.
Multiple FDs, dividends and TDS to reconcile? Let our CA team file it right.
File ITR with Expert →FD Interest Tax — Frequently Asked Questions
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Report FD Interest & TDS Correctly in Your ITR
Our CA-led team reconciles FD and dividend interest with your Form 26AS and AIS, claims every TDS credit and 80TTB/80TTA deduction, picks the right regime and files your return accurately — 100% online, across India.