{"id":11757,"date":"2024-05-28T13:20:54","date_gmt":"2024-05-28T13:20:54","guid":{"rendered":"https:\/\/www.indusind.bank.in\/iblogs\/?p=11757"},"modified":"2025-09-07T19:49:54","modified_gmt":"2025-09-07T19:49:54","slug":"what-is-tds-on-fixed-deposit-with-exemption-limit-calculations-and-more","status":"publish","type":"post","link":"https:\/\/www.indusind.bank.in\/iblogs\/calculators\/what-is-tds-on-fixed-deposit-with-exemption-limit-calculations-and-more\/","title":{"rendered":"What is TDS on Fixed Deposit (With Exemption Limit, Calculations, and More)"},"content":{"rendered":"\n

Like how you\u2019re charged with Tax Deducted at Source (TDS) on your monthly income, you\u2019re also taxed on investment instruments like Fixed Deposits.  <\/p>\n\n\n\n

Your TDS on <\/strong>FD<\/strong> interest<\/strong> may not qualify FDs as a tax-saving tool like a public provident fund (PPF). In case you don\u2019t know, TDS is the amount the sender deducts before the payee receives the money. This is paid to the central government on behalf of the recipient.   <\/p>\n\n\n\n

Let\u2019s understand how tax on interest on fixed deposits<\/strong> is determined, whether any FD interest exemption<\/strong> exists, how to save tax on FD interest, and commonly asked queries on FD-related TDS. <\/p>\n\n\n\n

What is TDS on Fixed Deposit? <\/h2>\n\n\n\n

TDS on fixed deposits<\/strong> is the amount the bank minuses from the investor\u2019s premium and interest combined after the FD<\/a> has matured. It is typically calculated via a predetermined percentage of the final payout and paid to the government as a tax. Next, this is added to the recipient\u2019s income tax accounts and eventually adjusted as per their respective income tax returns.\u00a0<\/p>\n\n\n\n

TDS = (Interest Generated) * TDS Percentage Rate <\/p>\n\n\n\n

How is TDS Calculated on FDs? <\/h3>\n\n\n\n

The amount of TDS deducted from FDs is calculated based on the interest income generated by the FD over a financial year. The calculation considers factors that include your applied interest rate, deposit amount, tenure, and applicable tax slabs. <\/p>\n\n\n\n

Start by determining the total interest income from your FD for the financial year. You can use an FD interest rate calculator for this data. <\/p>\n\n\n\n

The one-thumb rule states that anyone below 60 years of age whose interest income from all FDs yearly exceeds \u20b940,000, is charged a 10% FD TDS rate<\/strong>. <\/p>\n\n\n\n

If you don\u2019t have a registered PAN, expect to pay 20% TDS. Additionally, all the above rules remain the same for senior citizens, except that their interest earnings should exceed \u20b950,000 and not \u20b940,000. <\/p>\n\n\n\n

Also Read: <\/strong>Understanding the TDS (Tax Deducted at Source) on Current Account Interest<\/a> <\/p>\n\n\n\n

Is There an Exemption Limit for TDS Deduction on FDs? <\/h3>\n\n\n\n

The present Indian taxation scenario establishes exemption limits based on the account holder\u2019s taxable income and age. For example, account holders whose yearly earnings are under \u20b92.5 lakhs are exempted from fixed deposit tax deductions<\/strong> on their returned interest. This is an advantage for low-income bracket earners since their earnings on FD do not attract TDS. <\/p>\n\n\n\n

Also, you enjoy a tax exemption on the interest of FDs <\/strong>that return an annual income under \u20b940,000. But if you\u2019re a senior citizen, this exemption limit is raised to \u20b950,000. Thus, senior citizens are charged the standard 10% FD TDS rate if they earn anything more than \u20b950,000 through FD interest income yearly. <\/p>\n\n\n\n

In brief, you\u2019re eligible for an FD interest tax deduction if your yearly interest income doesn\u2019t exceed \u20b940,000. <\/p>\n\n\n\n

Use our FD interest rate calculator<\/a> to understand how much interest you\u2019ll be earning over a fixed period. <\/p>\n\n\n\n

Can Form 15G and 15H Help in Exemption of Income Tax on FD Interest? <\/h4>\n\n\n\n

Yes, filling out Forms 15H and 15G for FD interest tax exemption can help account holders with a yearly income under \u20b92.5 lakhs pay zero taxes on their FD investment. <\/p>\n\n\n\n

Similarly, Form 15H also helps avoid tax on FD<\/strong> investments, but exclusively for senior citizens above 60 years of age. Here are three conditions to remember before filling out Form 15H to prevent income tax on FD interest<\/strong>: <\/p>\n\n\n\n

  1. The investor must be 60 years old or under <\/li><\/ol>\n\n\n\n
    1. Yearly earnings must not exceed \u20b93 lakhs for senior citizens <\/li><\/ol>\n\n\n\n
      1. Yearly earnings must not exceed \u20b95 lakhs for super senior citizens (those 80 or above) <\/li><\/ol>\n\n\n\n
        1. Must be an Indian citizen <\/li><\/ol>\n\n\n\n

          Disclaimer: <\/strong>The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct\/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. <\/p>\n","protected":false},"excerpt":{"rendered":"

          Like how you\u2019re charged with Tax Deducted at Source (TDS) on your monthly income, you\u2019re also taxed on investment instruments like Fixed Deposits.   Your TDS on FD interest may not qualify FDs as a tax-saving tool like a public provident fund (PPF). In case you don\u2019t know, TDS is the amount the sender deducts before…<\/p>\n","protected":false},"author":5,"featured_media":11758,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1401],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\n\n\n\n\t\n","_links":{"self":[{"href":"https:\/\/www.indusind.bank.in\/iblogs\/wp-json\/wp\/v2\/posts\/11757"}],"collection":[{"href":"https:\/\/www.indusind.bank.in\/iblogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.indusind.bank.in\/iblogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.indusind.bank.in\/iblogs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.indusind.bank.in\/iblogs\/wp-json\/wp\/v2\/comments?post=11757"}],"version-history":[{"count":6,"href":"https:\/\/www.indusind.bank.in\/iblogs\/wp-json\/wp\/v2\/posts\/11757\/revisions"}],"predecessor-version":[{"id":19583,"href":"https:\/\/www.indusind.bank.in\/iblogs\/wp-json\/wp\/v2\/posts\/11757\/revisions\/19583"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.indusind.bank.in\/iblogs\/wp-json\/wp\/v2\/media\/11758"}],"wp:attachment":[{"href":"https:\/\/www.indusind.bank.in\/iblogs\/wp-json\/wp\/v2\/media?parent=11757"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.indusind.bank.in\/iblogs\/wp-json\/wp\/v2\/categories?post=11757"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.indusind.bank.in\/iblogs\/wp-json\/wp\/v2\/tags?post=11757"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}