TDS on FD interest is 10%, cut by your bank once the interest it pays or credits to you in FY 2025-26 goes above ₹50,000, or above ₹1,00,000 if you are a senior citizen. If the bank does not have your PAN, the cut is 20%.
TDS is not the full tax. Fixed deposit interest joins your other income and is taxed at your slab rate, whether or not the bank deducted anything. The sections below show how the bank counts the limit, what you can do if your income is below the taxable level, the 80TTA and 80TTB deductions, and the 5-year tax saving FD. The legal rule behind all this is section 194A, one of many listed in the TDS rate chart.
Quick facts
Rate
10% with PAN, 20% withoutLimit, below 60
₹50,000 of interest a year from one bankLimit, 60 and above
₹1,00,000 a year from one bankStop TDS lawfully
Form 15G or 15H (Form 121 from tax year 2026-27)Tax on the interest
Slab rate, under income from other sourcesSenior deduction (old regime)
80TTB up to ₹50,000Tax saving FD
5-year lock-in, counts under 80C in the old regime
FD TDS rate and limit for FY 2025-26
| Depositor | Yearly interest from one bank before TDS starts | TDS rate |
|---|---|---|
| Resident under 60, with PAN | ₹50,000 | 10% |
| Resident 60 or older, with PAN | ₹1,00,000 | 10% |
| Any resident without PAN | Same limits | 20% |
| Deposit with a company or NBFC | ₹10,000 | 10% |
The bank adds interest across all your FDs and RDs at all its branches, because core banking lets it see them together. Two banks are counted separately. A cumulative FD that pays only at maturity still has interest accrued each year, and the bank deducts on that accrual.
How TDS on fixed deposit interest is worked out: examples
A salaried depositor, two FDs at one bank. Arjun, 42, earns ₹38,000 interest on one FD and ₹24,000 on another in FY 2025-26. Total: ₹62,000, which crosses ₹50,000.
- TDS at 10% on ₹62,000: ₹6,200.
- He is in the 20% slab under the old regime, so tax on this interest is ₹12,400 plus 4% cess, ₹12,896.
- Credit for ₹6,200 is claimed, leaving ₹6,696 to pay with his return.
A pensioner below the senior limit. Kamala, 71, earns ₹92,000 of FD interest. That is under ₹1,00,000, so no TDS. She still reports ₹92,000 in her return.
Income tax on FD interest and the 80TTA and 80TTB deductions
| Deduction | Who | Covers | Limit | Regime |
|---|---|---|---|---|
| 80TTA | Individuals below 60 and HUFs | Savings account interest only, not FDs | ₹10,000 | Old regime only |
| 80TTB | Resident seniors, 60 and above | Interest on deposits, including FDs and RDs | ₹50,000 | Old regime only |
| 80C via tax saving FD | Individuals and HUFs | The amount deposited in a 5-year bank FD | Within ₹1,50,000 total 80C | Old regime only |
None of these apply under the new regime. A senior in the old regime with ₹80,000 of FD interest can claim ₹50,000 under 80TTB and pay tax on ₹30,000. Fixed deposit income tax exemption beyond these does not exist; interest from a tax saving FD is fully taxable too. See section 80C for the deposit side.
How to stop TDS on FD interest when no tax is due
When your income for the year will not reach the taxable level, hand the bank a self-declaration in April or when you open the deposit. For FY 2025-26 that is Form 15G if you are below 60, or Form 15H if you are 60 or older. From tax year 2026-27 a single Form 121 takes their place. Most banks take it through net banking or at the branch.
Form 15G is not allowed if the incomes you declare on it add up to more than the basic exemption limit, even if deductions would bring tax to nil. Form 15H only needs the final tax on your income to be nil. If TDS was already cut and you owe no tax, claim it back in your return; the TDS refund page explains how.
TDS on FD interest in tax year 2026-27
| Item | FY 2025-26 | Tax year 2026-27 |
|---|---|---|
| Law | Section 194A, 1961 Act | TDS table under section 393, 2025 Act |
| Rate | 10% | 10% |
| Limit below 60 | ₹50,000 | ₹50,000 |
| Limit for seniors | ₹1,00,000 | ₹1,00,000 |
| Declaration | Form 15G or 15H | Form 121 |
| Certificate | Form 16A | Form 131 |
The return for FY 2025-26 interest is filed in AY 2026-27. Interest for tax year 2026-27 is reported in the return for that tax year.
FD tax mistakes and fixes
| Mistake | Fix |
|---|---|
| Thinking no TDS means the interest is tax free | Report all interest; it is taxable at slab rate |
| Splitting FDs across branches to stay under ₹50,000 | The bank counts all branches together |
| Submitting Form 15G with taxable income | Pay the tax instead; a false declaration is an offence |
| Ignoring accrued interest on cumulative FDs | Report it every year as it accrues, matching AIS |
This explains Indian rules on deposit interest in general terms. Banks and limits vary and the law changes; for your own case, the safe step is to use the e-filing portal, or your own chartered accountant, to confirm the position.
Sources we checked
- Income-tax Act, 1961, section 194A
- Income-tax Act, 1961, sections 80TTA, 80TTB and 80C
- Income-tax Act, 2025, section 393
- Income-tax Rules, 2026
Frequently asked questions
What is the TDS limit on FD interest?
In FY 2025-26, the bank deducts once your interest from it crosses ₹50,000 in the year, or ₹1,00,000 if you are 60 or older. Company deposits have a ₹10,000 limit.
What is the TDS rate on FD interest?
10% if the bank has your PAN and 20% if it does not. The tax is credited to your PAN and shows in Form 26AS.
Is FD interest taxable even if no TDS is deducted?
Yes. Interest is taxable at your slab rate under income from other sources. TDS is only an advance collection.
What is a tax saving FD?
It is a 5-year bank fixed deposit that cannot be broken early. The amount you put in counts towards the ₹1,50,000 limit under section 80C, but only in the old regime, and the interest is taxed as usual.
What is section 80TTB of the Income Tax Act?
Resident senior citizens filing under the old regime can deduct up to ₹50,000 of deposit interest, FDs included, under section 80TTB. It is not open to those in the new regime.