Question
How is FD interest taxed and when is TDS deducted?
Answer
Bottom line: FD interest is taxed at your slab rate, and the bank deducts 10% TDS once interest crosses ₹50,000 a year (₹1,00,000 for seniors).
1. Taxation
Added to income under "other sources" and taxed at your slab; there is no indexation.
2. TDS
10% per bank above the threshold (20% without PAN); it is a prepayment, not the final tax.
3. Avoid it
Submit Form 15G or 15H if your income is below the taxable limit.
Estimate returns with our FD & RD Calculator.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.