TDS
Tax Deducted at Source — the tax amount banks automatically deduct from your FD interest before paying it to you.
TDS (Tax Deducted at Source) on Fixed Deposits is mandated by Section 194A of the Income Tax Act. Banks deduct TDS at 10% when your total FD interest at that bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens aged 60+). If your PAN is not linked, TDS shoots up to 20%. TDS applies per bank — interest from different branches of the same bank is aggregated. For cumulative FDs, TDS is deducted on accrued interest annually, even though you haven't received the payout. You can avoid TDS by submitting Form 15G (under 60) or Form 15H (60+) if your total income is below the taxable limit. TDS already deducted reflects in Form 26AS and can be claimed as a refund while filing your ITR.