FD Taxation
Definition
FD interest is fully taxable at your slab rate under Income from Other Sources; TDS is 10% (20% without PAN) above the FY2025-26 thresholds; tax-saving FDs give an 80C deduction on the deposit but the interest stays taxable.Fixed deposit interest is fully taxable in India, added to your income under 'Income from Other Sources' and taxed at your slab rate. Banks deduct TDS under Section 194A at 10% (with PAN; 20% without) once interest at that bank crosses the annual threshold — ₹50,000 for general depositors and ₹1,00,000 for senior citizens in FY2025-26 (raised in Budget 2025). TDS is not the final tax: interest is taxable even if no TDS is deducted, and must be reported in your ITR. Senior citizens can claim the Section 80TTB deduction (up to ₹50,000), and a tax-saving 5-year FD gives a Section 80C deduction on the amount invested (up to ₹1.5 lakh) though its interest remains taxable.
Related guides
Related terms
- TDS (Tax Deducted at Source) — Income tax that a payer deducts before paying interest or other income, and deposits with the government.
- Fixed Deposit (FD) — A deposit that locks a sum with a bank for a fixed term at a pre-agreed interest rate.
- Senior Citizen FD — A fixed deposit that pays resident individuals aged 60+ a higher interest rate (commonly about 0.50% more); same DICGC cover and taxation as a regular FD, with extra tax relief.
Definitions are general and educational — not advice. Verify current rates, limits and thresholds with the provider or the RBI/SEBI before acting. See our editorial policy.