Income tax on fixed deposit interest – can we save or avoid tax?

Income tax on fixed deposit interest – can we save or avoid taxIncome tax on fixed deposit interest – can we save or avoid tax?

Investors love to invest in fixed deposit schemes. However, though the banks are offering good interest rates, post TDS the returns are low. In this article we would articulate the various fixed deposit schemes, the income tax on fixed deposit interest and are there any ways to save the tax?

Bank fixed deposits schemes

Investment in bank fixed deposits offers a fixed income along with providing safety. There are several banks who are offering unique bank fixed deposit schemes. The current interest rates are varying from bank to bank which are around 7.5% to 10% p.a. The tenure of bank deposits are from 15 days to 10 year period. Currently there are various types of deposit schemes such as Term deposits/fixed deposits, recurring deposits and tax saving fixed deposits. Banks deduct TDS (Tax deducted at source) for any interest earned beyond Rs 10,000 in a year.

What are the TDS or tax on fixed deposit interest?

  1. Interest income < Rs 10,000: No TDS would be deducted
  2. Interest income > Rs 10,000 :If you have submitted PAN details, any interest beyond Rs 10,000 interest income, the TDS would be deducted @ 10% p.a. If you have not submitted PAN details, any interest beyond the limit, the TDS would be deducted @ 20% p.a.
  3. Submission of form 15G: In case the investment is done in the name of a spouse whose total income including the interest income is not exceeding the total taxable income, then your spouse can submit Form 15G to bank so that bank would not deduct TDS.
  4. Submission of form 15H: In case any senior citizen of > 60 years is invested in fixed deposit, they can submit Form-15H so that TDS would not be deducted.

Then, what is income tax on fixed deposit interest?

The interest on fixed deposit need to be treated as “Income from other sources” in your income tax return and appropriate income tax based on your income tax slab would be applicable. Please note that you need to  include total interest and not the differential. e.g. if you have received Rs 11,000, don't just add Rs 1,000 (Rs 11,000 minus Rs 10,000 exemption). You should add Rs 11,000.

Can we avoid or save tax on fixed deposit interest

It is not true that we can avoid or save tax on fixed deposit interest. Let us see the following scenarios.

Timing the FD: If we can invest in FD during middle of financial year, then the interest income for the financial year would be half of of the total interest and it would be < Rs 10,000 and we can avoid tax, how far this is true?

If this is the case, what happens next financial year? You may avoid tax temporarily for few months in current year and you cannot avoid every year.

Investing in various branches of bank to avoid tax: Can we avoid tax on fixed deposit interest by investing in various branches of the same bank? The answer is no. If you invest in various branches of same bank, banks would still treat them as single customer and club all interest income and compute TDS. You cannot escape.

Investing in various banks to avoid tax: Can we avoid tax on fixed deposits by investing in various banks? The answer is no. If you invest in various banks, they would treat them separately and if the interest income in a bank is not exceeding Rs 10,000, TDS may not be deducted. However when you file income tax return, you need to show the interest income on “Income from other resources” and you need to pay income tax at tax rate applicable for you. You may avoid TDS from bank side, but you still need to pay tax from your end.

Can we claim the TDS if it is wrongly deducted due to non submission of Forms to banks

If you have not submitted Form15H or Form 15G, you can get TDS certificate from the bank and claim the refund through your annual income tax filing. The process may take time, but you would get refund from income tax department.

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Income tax on fixed deposit interest – can we save or avoid tax?

Article by Suresh

Suresh KP i.e. me have written 500+ articles on this blog. I love doing analysis and identifying the Best investment options.


  1. gajanan says:

    Dear Sir,

    I am a salary person and I have paid 30% income tax as per slab. now I have one FD at bank and bank has deducted TDS @10% on interest amount and paid to IT department. when i have incorporated it in ITR-1 it showing the diff amt of 20% on interest is to be payable.

    Now pl guide wheather as per IT rule I have to pay TDS on interest as per slab (ie 30% in my case) or already deducted @10% is correct.

    • Suresh says:

      Gajanan, Interest of bank FD would be added to your income and is taxable as per your income tax slab. If you are falling in 30% tax, you should pay as per this slab. If bank has deducted 10%, you should pay balance 20% + Educational cess. Please pay this amount thru online in any bank and submit the ITR

  2. Vignesh. S says:

    I have some basic doubts.

    1. When is E – Filing mandatory and when is manual filing mandatory?

    2. If the interest income of my wife and mother (on each account) is less than 2 lacs, do i need to file ITR?

    • Suresh says:

      Vignesh, There were no specific guidelines like that. Any one can do e-filing. However there was news that if taxable income is exceeding Rs 5 Lakhs one should file e-filing only. 

  3. patil says:

    i  have made 80c 5 year fixed deposit of amount 49,000 with SBI . So at the end of 5th year , will there be any tax deducted on the intrest . Few say that only if intrest exceed Rs10000  in year then only tax will be deducted , but few say that at the end of the 5th year what ever intrest earned is taxable . Kindly help with this confusion ..


    • Suresh says:

      Patil, Interest earned should be shown every year in your income tax return and necessary tax should be paid based on your income tax slab. If your bank has already deducted tax, you need to reduce that and pay balance only. Interest upto Rs 10,000 on SB account is tax free. However yours is tax saver FD which is like any other regular FD and necessary tax is applicable

      • Rakesh says:

        Hi Suresh,

        I am posting my queries since last two days but I don't get to see any reply. To add to that my posted queries are also deleted. If you don't want to reply or don't have time to reply then please do drop a message. It will help.




        • Suresh says:

          Rakesh, Don’t get upset. I generally do not delete any message. I got more than 500 comments in last 48 hours+ and I do not have team to respond them. I have do it myself as this is free blog. Please have patience, I am clearing one by one.

  4. Swamy says:

    Dear Suresh,

    While filling my e-filing, I got confusion about the other income details. I have 5 FD's matured during the period of 2012-13 financial year. But I didnt get any Form-16A from bank. Should I approach them personally?

    1) I do not know how to include these as returns in the ITR-1. All of them have been TDS done, is it still mandatory to add those to ITR-1?

    2) 2 items have been autofilled in the ITR-1 online form under other income from interst on FD. But I dont know if this needs to be updated, kept as it is or how…

    Please let me know



    • Suresh says:

      Swamy, Yes please approach your banks to get form16A  1) Yes please add else later you might get notice from IT that tax is not paid for interest income 2) Since you are filling online and based on your PAN card, system would have extracted whereever there is TDS deducted by bank.

  5. veena says:


    I get a difference of Rs10 as tax payable (mainly due to the rounding off digits E.g: 48 is rounded up to 50 ; 42 is rounded to 40) row in the 2013_ITR1_PR6.xls downloaded from website. The amount of tax deducted at source matches with the tax payable , if calculated on a tax calculator. Could you please let me know if I can submit the ITR with this tax payable amount of Rs.10 or is it necessary to pay this amount?



  6. Gopal says:

    Suresh, how you say  exempted interest Rs.10000 is including both savings and fixed deposit interest ? To my knowledge, only savings interest is exempted. For FD interest any amount of interest is taxable. 

    • Suresh says:

      Gopal, What is said is correct and the same is reflected in the article too. Please inform whether there is any error in the article. I have gone thru this again and could not found any error. 

  7. Kirti Azad says:

    I'm a government employee with annual income of 9 lakhs. I've a auto sweep account in SBI.As per form 26AS & form 16A by bank. Total interest for FY2012-13 is Rs 9832/- and TDS deducted is Rs 1088/-. Can i claim Refund for TDS deducted under section 80TTA? Which ITR form I've to fill while submitting ITR for AY2013-14?

    • Suresh says:

      Kirti, Interest on SB account is tax free upto Rs 10,000. Since your interest is FD, it would be taxable. You should include in your income and pay necessary tax. Looks bank has deducted tax of 10%+. Please add the interest to your total taxable income and arrive tax liability. Deduct Rs 1,088 and pay balance after educational cess.

  8. K S Narayanan says:

    Dear Suresh,

    My only source of income is through Bank Fixed Deposits and that too is less than Rs 1.80 Lakhs. Do I need to file Income Tax retun for the FY 2012 – 13 ?


    • Suresh says:

      Narayanan, Bank would have deducted TDS right ? If yes, since your income is not taxable, you can claim refund by filing ITR. If bank has not deducted TDS, you have an option as income < Rs 5 L they need not file ITR

  9. Pavit says:

    Hi Suresh

    Thanks for taking the time to pen it down for us and following it up, you're being great help. I have a problem I can't seem to fix. My total taxable income is 2,26,080 so the tax payable is 2686. I made an investment of 25000 in Mar '13 towards Post Office Saving Account but I couldn't declare it because my company finance had blocked investment declaration by then due to year-end. Can I declare it now and get a refund? I can't seem to find that option on any site. Please help..



    • Suresh says:

      Pavit. 1) Which post office saving scheme you have invested. All Post office schems are not eligble for tax exemption under 80C. Only NSC or 5 year Post office TD are eligible for 80C exemption. If you have invested in any of these two, you can claim this as deduction under 80C. So your total taxable income would be Rs 226,080 minus 80C exemption of RS 25,000 = Rs 201,080. You need to pay tax on Rs 1,080 @ 10% + edu cess on it. Since TDS is already deducted for RS 2,686.Please fill your ITR online or by manual ITR so that you can claim the refund of balance. If tax auditors are coming to your company to help all employees you can submit relevant docs and claim exemption. 

  10. mahesh kumar says:

    Hi suresh,

    i done with fixed with sbi bank and while filling itr online i am able to know my bank paid as interst 7212 and 1312 as tds and my taxble income is 846560 for that my employer issue form 16 . whether i need to pay any tax for the same .i did not disclose my interst information with my employer.

    • Suresh says:

      Mahesh, Since you are falling under 20% tax bracket, you need to pay 20% interest on your bank FD too. But looks bank has deducted less amount. Please check online ITR return and compute your taxable income by adding FD interest and if any difference is there, you need to pay tax online before filing the ITR

  11. pavan says:

    hello suresh,

    thanks for the article, its very helpful.

    my story is , my father is a pensioner from central govt. of 10000/month and he wants to invest his money in FD's. he is planning to invest 5lacs in a mututal(father+mother) FD scheme in which interest has to draw every month. and another 5lacs on my name(son) for 1 year without drawing any interest. we hav only my father is the source of income. so my queries are,

    1) whether we hav to pay tax for this FD's.

    2) which FD's are good whether mutual are individual which helpful to my mother with tax free.

    3) will i hav to pay tax on my individual FD. if so, suggest a good Tax free scheme 

    clear my queries and suggest a good FD schemes of above.


    • Suresh says:

      Interest on bank FD, you should club entire interest amount in your IT Return and pay tax as per your income tax slab. 1) Rs 5 L FD (father+mother) – You may get Rs 45,000 (9% interest), your father need to pay tax on this based on his tax slab. Since he is retired and he is getting Rs 10,000 only, his total income would be Rs 120,000 + Rs 45,000 (Inteest) which is within the limit of tax exemption of Rs 2 L, hence no tax is payable 2) Since your monther do not have other income and if your father deposits in your mother name, the interest would be clubbed in your father’s income and tax needs ot be paid 3) It depends on your taxable income. If your taxable income is exceeding Rs 2 L, then adding this interest would make it taxable and you need to pay tax. You can refer our regular monthly bank FD articles and choose a high interest rate bank and invest in them

  12. Surendra says:

    Thanks for the very informative article.


    Want to know the how we can show the interest earned by the savings account while filing the returns. Also, how I can claim the relief of Rs 10,000/- in the ITR form.

    Best regards,


    • Suresh says:

      Surendra, If the interest on SB account is < Rs 10,000, it is exempted from TDS and you need not show this income. However if it is FD interest, entire amount is taxable

  13. SJM says:

    Dear Mr. Suresh,

    I had taken NRF loan from my PF for buying a home but unfortunately I have to cancel the booking. Now, I have made FD of this amount  in Mother's name who is Housewife and technically is not dependent of mine. Interest is crossing 10,000/- Limit. I want to know whether I need to pay income tax on the interest amount or she needs to pay. Also I would like to know whether interset crossing 10,000/- towards savings account in a F.Y. also attract income tax. Pl. advice. Thank you.

    • Suresh says:

      Hi SJN, the FD is in your mother name, hence if you can prove that she has some income, you can avoid this tax, else this interest would be clubbed under your income and IT has to be paid by you. Also any interest if exceeds Rs 10K would be taxable on full amount

  14. Akashdeep Gogoi says:

    Hello Suresh ! I am Akashdeep from Mumbai, I don't have much knowledge on investments and taxes so please guide me. My first question is that will the bank deduct TDS on my total interest earned from my fixed deposit and my savings deposit when it is above 10000 INR, or is it going to consider only the fixed deposit interest earned . I opened an RD of 20000 INR in the month of June in 2012 for 15 months maturing on Sept 2013. How will the tax be considered in my case ? because my interest earned is spilt in between two financial years.

    Thank You !

    Akashdeep Gogoi.

    • Suresh says:

      Akankshdeep, Bank would not deduct TDS for RD account. You need to computer the interest earned for a financial year and indicate in ITR form and pay necessary tax. Rs 10,000 is total tax which includes FD + Savings interes

  15. Niranjan says:

    Dear suresh,

    I have NRE FD,S  maturing in year 2020 with interest on maturity. I have come back to india for good. Do I have to show the NRE FD'S in my tax returns or I am exempt from incometax on these FD's. Also can I continue holding the NRE FD'S  till maturity although I am now a resident.



    • Suresh says:

      Niranjan, There are some guidelines regd this. If you have returned permanently to India, you need to approach your bank. They would first convert your account into normal resident account. However you would get returns on original fixed rate. The returns what you have been getting are not taxable. But once you convert to resident account, the returns are taxable as per your income tax slab.

  16. samir mehta says:

    sir,would like to know,which ITR form to be filled for my mother aged 65 years & her income is only throughFIXED DEPOSITS interest around 2.00 lakhs p.a.


    • Suresh says:

      Samir, if the income is less than Rs 2 lakhs, the amount is exempted from tax. Point no.2, if the taxable income is < Rs 5L and necessary tax is paid, you need not file IT return. But if you still want to proceed you can fill ITR-1 and FD amount to be shown in "Income from other sources".

  17. surabhi says:

    Hi i have interest income on 7661. do i still need to show it in income from other sources. As this is below 10000, should i leave that coloum blank.

  18. Abhigya Raj says:

    Hi Suresh,

    After reading all your replies, I thought to get some expert advise from you.

    I am working in Saudi Arabia from more than 3 years. During this period I have visited India atleast 7 times for a duration ranging between 1 week to 1 month. I have 2 house property in India, I consider one of the house as Self Occupied for Tax purposes.

     I remit my salary to my Savings Bank Account in India. I have below queries.

    1.       I am filing my return from last 6 years while I was in India and I continue to do so even when I am staying in Saudi. I am doing so because of my current income earned from House Rent and Interest income on the deposits in India. These income clubbed together are not more than INR 200,000. Should I file my return this year.

    2.       While filing my return What should be shown as my Residential Status – Resident, Non Resident, Resident but Not Ordinarily Resident.

    3.       Should I need to show my salary from my employer in Saudi Arabia as Salary Income in the tax return. Currently there is no income tax in Saudi Arabia.

    4.       I don’t have any NRE/NRO account, I remit my savings to my  savings bank account in India. I have made Fixed Deposits to this bank. So there is Interest earned on the FD as well as on the savings accounts. Interest earned on FD is 50000 while interest on 2 different saving accounts is 15000 (INR 8000 and INR 7000) , How this interest would be accounted for in the return.

    5.       Is it mandatory for me to open an NRE/NRO account.

    6.       Do I need to close all my saving accounts in India If I opens a NRE/NRO account.

    7.       I provide part time  online consultancy to some US clients who are customer of a US Company based in Chennai. I raise my invoice to this Chennai  based company. After charging TDS, they deposit my consultancy charges to my Indian saving bank account. Should I show this income as “Income from Other Sources”


    Abhigya Raj


    • Suresh says:

      1) Yes you need to file ITR. 2) Residential status depends on how many days you were in India. Please go thru the guideline 3) When you file ITR in India, you need to show money which you first got in India. If you earned in Saudi and transfer the money to Indian account, it is not income in India. 4) Suggest quickly open NRE account to get repatriation and other benefits. You should include interest income in your ITR 5) You would have several benefits like repatraitaion and tax free interest 6) You need not close your exising saving account 7) Since the income is first received in India, you have to show this income. You can show this under “Profession”. For this you need to file ITR-4

  19. Shankar says:

    Hi, I have a number of FDs in a bank.I have two queries regarding the TDS part of these FDs.

    a) TDS has been deducted on these FDs (@10%)  and i have got Form-16A. Only problem is there are 72 entries in the form 26A for the entire year. Now while filing my IT return do i need to reflect all these 72 entries of income from bank FD interests in the "income from other sources" head ??

    b) Now while computing IT,( i am in the 30% bracket) – when i reflect the bank FD  interest in "income from other sources" do i need to pay the difference of 20% (30% minus TDS @10 %). This is coming out to a lot – so wanted to confirm !!

    • Suresh says:

      Shankar, Point no.1, not required 2) Yes you need to pay difference of what bank has deducted (20% tax) Vs what you are getting in ITR (30% tax slab)

  20. mani says:


    My bank did not have my PAN card and it has been deducting TDS @20%. Can I claim the refund for the TDS deducted in the last FY, if I give my PAN card now and re file the ITR for last year…

  21. ranjit says:

    hello my question is little bit different. If I fixed deposit a lumpsum amount in my fathers name who is not a salary person then I will get higher interest rate. So my question whether i have to declare this income in my tax calculation being a salary man myself?



    • Suresh says:

      Ranjit, If you can prove that your father is earning and the interest pertains to him, he can file ITR in his name and get tax exemption. If the money is used from your saving, then interest has to be clubbed in your income and file ITR and pay necessary tax.

    • bemoneyaware says:

      Suresh I think differently here, correct me If I am wrong

      As you are an adult you can gift it to to your father and then it becomes his income. Gift is shown as exempt income in Income tax return and then as it is his money he can invest where he wants, if he invests in FD he will get higher rate of interest as he is senior citizen. Interest on FD will be his income.

      Clubbing of income works other way- when parent gifts to a minor child. For a major child, it is again allowed


      • Suresh says:

        Kirthi, I have seen several income tax sites and forums where it indicates that unless you prove that the person has income (say e.g. house wife who does not have income), the income would get clubbed with spouse total income. If this option is available, every one would invest in their spouse, father, mother or sister name who might not be earning money

  22. Guru says:

    Hi Suresh,

    I am saving Rs.2500 pm in a RD scheme which will go on for 5 yeards. Can i show this savings for saving Tax in Tax declaration.

    If yes,then will it be the amount paid per year that needs to be shown/quoted in the Tax declaration.


    • Suresh says:

      Guru, There are Tax saver FD’s. But there are no Tax saver RD’s. What you are investing in a recurring deposit and you cannot claim in under 80C

  23. Aaryan says:

    Hi Suresh,

    Thanks for the wonderful article.

    Please advice me if I should file ITR for last year (FY2012-13) again or not:

    I had not included interest from Savings account, FD account while filing it last year. But even if I include the interest in 'income from other sources' column, my net taxable income will be less than 2L. Hence there will be no difference in the refund amount that I have already received.

    If in case I have to file ITR again, what will be the procedure for that. I have already filed it in July last year and have also received the refund check for income tax dept.


    One more query:

    I had aFD in a bank which did not have my PAN number. When i checked some time back, I got to know that the bank has been deducting TDS @20% from the interest since last year. Is there any way I can get the TDS already deducted by bank, reflected against my form 16 AS for the last year, so that I can include it while filing the ITR again for last year.Or is there no way to get back the TDS amount deducted last year.


  24. subhash kumar says:

    Dear Sir,

    My father is ex  army he invested in fix deposit two lac at the time of withdrawal bank deduct TDS ,unfortunaly they was not summit 15 and 15g, kindly suggest  how can gate refund. matter is 4 year ago.plese ,please mail how can gate ,papa not file itr or any rerurn and live in village.

    • Suresh says:

      Subhash, I don’t think you can get any refund which is 4 years old. please apply for PAN card and submit form 15 and ITR from this year onwards.

  25. TILAK says:

    Good Morning sir thank you for ur replies,sir currently I m working as a Part Time Employee so my mnthly income (even after including Int of 18,000) doesnt fall on 10% brackett ,then also do I have to pay int on FD ? & if not then do I need to fill up any form?
    & ALSO MY LAST que. To you : my company’s HR had by mistake transferred Full Time Salary from Nov’12- April’13 due to which extra Income Tax was deducted from my Salary,Can that Tax Can be refunded or I can claim anyhow ??????thanks

    • Suresh says:

      Tilak, please fill form 15g at bank where you have FD. Bank would not deduct tax as your income is less than Rs 2L. Since your income is < Rs 2L you need not file IT Return too. For last year, please fill ITR and claim for refund

  26. AJIT says:

    Hello sir,

    I am Ajit prabhu   I have a problem in e-filling

    I had salary with arrears around 6lakh (income chargeable under salary) received form 16 from employer so I must have to e-file and I have refund claim under perquisite (remote area)

    I had an FD of 1 lakh for 1 year and earned interest 10112.00 problem is I also given 15g so bank did not deducted any tax,

    When I verified 26AS while e filling there are two TDS one from employer and one from bank with nil tax

    I approached bank to provide form 16A so I can fill UTDS no(6 digit) in e-filling for income from other source. but bank refused to provide they said there is no tax deduction made in my account from them so they can not provide form.I argued to provide form 16a with nil tax deduction and they said sorry

    1. Now how can I show income form interest in e-filling without any UTDS/form16A

    2. Can tax on interest can be deducted from pending refund( tax on interest is Rs.2000 and refund is Rs 5000) or i must pay through bank first then claim full refund.

    Kindly Suggest me at the earliest.

    Thank you,


    with regards.


    • Suresh says:

      Ajit, If your interest is credited to your account, please proceed and show the interest. Bank would give the tax certificate only if they deduct TDS. When you fill the ITR, you would fill all income and interest income and also include total tax paid. You would pay only balance tax (if applicable)

  27. TILAK says:

    Sir,interest will it be 10% of 18000 or 10% of amnt >10,000? & also I dont know about mutual funds can u pls send some article links of yours on MF ???

    • Suresh says:

      10% of Rs 18,000 is taxable if you are in 10% bracket. You can click on “Stocks and Mutual funds” in category wise in side bar. you would get all mutual funds articles on that. 

      • TILAK says:

        Sir thank you for ur quick replies,sir currently I m working as a Part Time Employee so my mnthly income (even after including Int of 18,000) doesnt fall on 10% brackett ,then also do I have to pay int on fd. ?
        & ALSO MY LAST que. To you my company’s HR had by mistake transferred Full Time Salary from Nov’12- April’13 due to which extra interest was deducted from my Salary,Can that extra int. Can be refunded or I can claim anyhow ??????

  28. TILAK says:

    Namastey Sir,
    I would like to invest Rs 2 Lakhs on FD for 1 Yr ,Sir my question to you is (1) On which month should I start my FD to make sure no tax is deducted or least tax deducted & sir (2) Which bank is currently offering best int. Rate for 1 Yr. Thanks

    • Suresh says:

      Tilak, If you invest Rs 2 lakhs for 1 year, you would get approx Rs 18,000. If your interest is < Rs 10,000, bank would not deduct TDS, else they would deduct TDS of 10% (provided you submit PAN no). Also the interest amount would be added to your income and necessary tax would be applicable. If you want to avoid tax, you can invest in tax free investments like stocks, equity mutual funds, PPF etc. However investments in stocks and mutual funds would have some risk invovled.

  29. Ketan says:

    My query is as below. 

    I have tax saver FDs on which I earn interest. TDS is deducted @ 10% on the interest as per Form16  . I am a salaried person and have no other source of income other than salary and interest on FDs. When I am including the interest income and TDS, as per ITR calculation, I still have some tax to be paid. I fall in the slab 2. Is this correct. If yes, please explain why as TDA is already deducted and paid. Is the tax payable due to a higher percentage of slab 2?

    • Suresh says:

      Ketan, when you submit form 15h to bank, bank would deduct 10% TDS. If you are in 20% slab, when you input these info in ITR form, it shows that you need to pay further tax. As you have paid only 10% on Bank interest, you need to pay balance of 10%. Please check this is how it would have got computed. Pay tax online with any bank (indicating your PAN no.) and file ITR

  30. Vini says:

    Hi Suresh

    Thanks for answering all the questions.

    I'm a software engineer and want to settle in another 2-3 years. I've a questions.

    I would like to put 50L in FD and planning to do some agriculture work. I'm sure, in our country there is no tax paid by farmers. 

    In that case, there is no other income for me, other than the FD interest. Let say, I will get 5L as an interest per year, Do I need still fall on the common tax slabs? Is there any special taxes for the interest earned through FD?

    Let say 2L to 5L is 10% for the common slab, in that case, do I need to pay only 30000 as tax?

    Please clarify.

    • Suresh says:

      FD returns are clubbed into individual income. Tax slab rates are same. Yes you need to pay Rs 30,000 + edu cess.

  31. John says:

    Hi Suresh,

    Thank you for a very informative article. My wife is temporarily out of a job so I deposit 1 lakh every year in her PPF account. She too files her return every year since the bank deducts TDS

    When she files her return

    a) can she show the 1 lakh received from me as salary (she assists me in my freelance work so I think we could call it a salary)

    b) or does it have to be shown as a gift (which would mean the interest from PPF would have to be included in my income).

    c) or can it be shown as a short term loan interest free loan to her (she would be resuming her professional life in a couple of years once our kid is a bit older)

    Assuming it has to be shown as a gift, then I will have to include her PPF interest in my returns for this year. Do I also have to include this in subsequent years filings as well?

    A last question: What if we have a joint account for household expenses. If I deposit money there and she uses the surplus to invest in PPF, do her returns from PPF still need to be clubbed in my income? 

    Thank you for your answer


    • Suresh says:

      I faced similar problem and thought of taking help from a chartered accountant who is more professoinal in handling such situation. a) You can show it as salary to your wife upto Rs 20,000 in cash per month. If you still want to show higher amount, you can do that by issuing a cheque in her name and she can deposit in her account and use the proceeds. However you are paying her as a employee, means you are running a profession, means there should be TAN number (given to individuals who have professions where they hire employees). You should be deducting income tax on the amounts paid to your employees based on their income tax slab. b) You can give as gift to your wife as he falls under definition “relative” as per income tax act. However, any returns coming from such relative would be clubbed in your income c) You can show as short term loan, but income would be clubbed with your income d) You need to include any such returns on all IT filings. d) If you can prove that she has some income from where she is able to save and invest, it should be ok, else it would be clubbed into your income. Finally note that PPF returns are not taxable. Even if you gift money to your wife and she invests in PPF, returns on PPF cannot be clubbed in your income as PPF returns are not taxable :-)

  32. Abhijeet Bhattacharya says:

    Hi ,

    I am a salaried employee and i have few FDs in SBI bank. Bank has deducted 20% TDS on interest accumulated. When i fill data to ITR-1 online it shows that i need to still pay some tax as i fall under 30% tax slab.

    I want to know that do i need to pay any interest on the tax payable and if yes then how to calculate that, also educess ?

    or can i blindly go ahead any pay the tax calculated by ITR-1 form online.


    • Suresh says:

      Abhijeet, If your income has exceeded Rs 10L, you would fall under 30% tax slab. Please check this. Since your bank has deducted only 20%, you have to pay 10% tax on interest + edu cess. You can quickly check at high level whether this is matching with what it is showing in ITR. If you are ok, you can proceed and make payment to bank.

  33. Raj says:

    Hi Suresh

    I am an NRI and planning to invest my money in FD and savings in India. If my total annual interest is less than 2lacs and this is my only income in India, should i be filing any tax at all? if no, then can i just fill in 15g to avoid the bank deducting TDS and just refrain from filling any forms or ITR?

    I do not wish to open an NRE account yet as im planning to have FD's over 6 months and not 1 year which seems to be the criteria for NRE accounts.

    Please let me know :)

    Many thanks


    • Suresh says:

      Hi Raj, if your taxable income inclu interest income is not exceeding Rs 2 Lakhs, you can fil the form at bank (15g) and bank would not deduct any tax. If by any chance they deduct, you cna file return and claim the TDS back from IT dept.

  34. Rishabh says:

    Sir, Can you please explain me Family pension and how is it taxable ?

    We get “Family Pension” and I have read on the income tax website that "Family Pension" will be taxable under the head, Income from Other Sources. The asseessee will be allowed a deduction of a sum equal to one-third ( 1/3 rd) of such income or rupees fifteen thousand , whichever is less.

    I dont understand what does the above statement means, what is the deduction amount and where can we find the component when filing the return. How can we specify this in the IT return?

    Thanks a lot in advance.


    • Suresh says:

      Hi Rishabh, Family pension is exempted from tax upto 1/3rd pension or Rs 15,000, whichever is lower. e.g. if your family pension is Rs 48,000, one third is 16,000. Means Rs 16,000 or Rs 15,000 which ever is lower is exempted u/s 57. Out of Rs 48,000, if we exempt Rs 15,000, Rs 33,000 is taxable income. It should be included in “Other income” in your IT Return and necessary tax to be paid.

  35. Krishna says:

    Hello Suresh,

    I have FD in two bank accounts both exceeds 10.000 and TDS @ 10% is already deducted. Now I should add both interest as other income and how to pay the remaining 20% tax ( asuming tax slab is 30%)? is there online payment and validation option?

    • Suresh says:

      Krishna, You can pay online tax through any authorised bank. You need to indicate PAN number while making the tax payment.

  36. Mohit says:

    1. I am a Salaried Individual. My Total Income i.e. CTC is 595,000 per annum. I had a investment of 1 lakh under 80C. So my effective taxable income is 4,95,000. So I falls under 10% tax bracket.
    Total TDS deducted by employer = 30,385 (29500 as Tax@10% and 885 as education cess@3% on Tax)
    2. I had a FD of 2,00,000 in a bank @10% interest. Total interest = 20,000, bank has deducted TDS of Rs. 2000.

    Now my queries are as below –
    a. At a time of filling IT return If I club my income 495000+20000=5,15,000 it became greater than 5 Lakh and I comes under 20% bracket. Since both my employer and bank has already deducted TDS, do still I need to pay any extra tax?
    c. Do I need to pay education cess also on TDS on bank deposit deducted by bank?

    • Suresh says:

      Mohit, You are falling in 20% tax bracket to the extnet of Rs 15,000 (Rs 515,000 minus Rs 500,000). Means you need to pay 20% of Rs 15,000 income. It would work out to be Rs 3,000+educational cess. Upto Rs 5 Lakh, you need to pay Rs 30,000 (Rs 5,00,000 minus tax exemption limit of Rs 2 lakh) x 10%. Net you need to pay Rs 33,000 + educational cess. Since you already paid Rs 29,500, please pay balance of Rs 3,500 + edu cess and file the IT Return.

      • A K Dey says:

        Mohit has to pay Rs 3,500 + edu cess. But bank has already deducted Rs 2000.

        so he has to pay Rs 1500+ educess, correct ?

        • Suresh says:

          Hi Dey, Thanks for correcting me. You are correct, Mohit need to pay balance amount after reducing what bank has already deudcted, Mohit, please note this. 

  37. Samarth says:


    My mother is a housewife and TDS is deducted on her FD interest. Form 15 G as well as ITR-1are not submitted. What is the procedure to get the deducted Tax amount?

  38. Anita Sinha says:

    Dear Suresh

    We are in 30% slab, our bank SBI has given intrest on our MOD (Multy Option deposit) & deducted 10% TDS, some persons have got intrest <10000 & some persons >10000, kindly confirm whether all persons has to deposit balance tax or only >10000 has to pay.

    Further kindly confirm tax will be calculated on full intrest recieved or on amount axceeding Rs.10000 

    • Suresh says:

      Anita, If you have FD interest upto Rs 10,000 it is exempt from Tax. If it exceeds, you need to show full interest in “Other income” in ITR and pay income tax applicable to you.

  39. Amlan says:

    My mom has FD's whose interest anually is just below 2 lakhs around 1.9 …now she also has a post officer deposit which gives her around 36 thousand annually …but i guess ,her total taxable income would be only 1.9 and not 1.9 +0.36 ,so if i am right she will be exempt from any tax since total taxable income falls below 2 lakhs  .,now since her pan card is deposited with the bank , the bank has deducted 10 % tax ….

    Now ,since she is exempt from taxes because her total taxable income is below 2 lakhs ,she would have to file return for this 10 % tax which bank has deducted 

    My question is  which income tax return form i need to fill for her ,ITR-1 or ITR-2 wherein i can claim this deducted tax by the bank as tax return …….(do you have any article on which ITR forms are applicable to people having only FD's as earning's)

    Can you also tell me which ITR form is applicable ,if someone ins tock market and has only earning from equity sale 

    Comin back to my mother's case ,while filing E return online ,does she have to attach any documental proof  for tax deducted by the bank or whether the facts provided by her shall suffice (which will be perhaps matched by form 26 AS which would reflect the Tax deducted by the bank )….since she would be creating a user id and login for the first time ,will the form 26 AS reflect the tax deducted .I am made to understand it would because tax deductions by bank are linked to person pan number and her pan number is deposited with the bank ,


    Summarising ,my 2 questions stay ,

    (1) Which form ITR-1 or ITR-2 would be applicable for her to file return for the x amount ( 10 % tax )deducted since her total taxable income falls below 2 lakhs ?

    (2) Does she have to submit any documental proof while filing the return online or whether the facts will be checked against form 26 AS by income tax department themselves 


    (3) Which ITR forms are applicable to 

    (a) Housewives only having FD as source of income

    (b) Stock brokers who make money from buying and selling of stocks 

    (4) If income from post office x1 and bank FD interest(x2) adds to more than 2 lakhs say 2.3 lakhs ,will thsi be accounted for tax computation or only taxable income be taken into consideration ?


    Thanks for your lovely articles ,


    Regards ,



    • Suresh says:

      Amlan, Here are my responses. 

      (1) Which form ITR-1 or ITR-2 would be applicable for her to file return for the x amount ( 10 % tax )deducted since her total taxable income falls below 2 lakhs ?

      Suresh: Please file ITR-1. Please note that your mother total income is Rs 1.9 + 0.36 = Rs 2.26 laks and not Rs 1.9 lakhs. Interest on Post office TD is taxable (though they would not deduct any TDS)

      (2) Does she have to submit any documental proof while filing the return online or whether the facts will be checked against form 26 AS by income tax department themselves 

      Suresh: No need to submit any proofs.

      (3) Which ITR forms are applicable to 

      (a) Housewives only having FD as source of income

      Suresh:  ITR-1 only

      (b) Stock brokers who make money from buying and selling of stocks 

      Suresh: There would be Short term capital gains or long term capital gains. ITR-1 only would apply.

      (4) If income from post office x1 and bank FD interest(x2) adds to more than 2 lakhs say 2.3 lakhs ,will thsi be accounted for tax computation or only taxable income be taken into consideration ?

      Suresh: Your total income would be Rs 2.36 Lakhs. If exemption limit is removed, taxable income would be Rs 36,000 and tax would be Rs 3,600 (+cess). If bank has deducted Rs 19,000, you can claim the difference back by filing IT Return.

  40. Arpit says:

    Dear Suresh,

    Thanks for the very informative article and responses.


    I would like to know, if I gift INR 1,00,000 to my wife;

    1. Can she invest the same in her PPF ?

    2. As income on PPF is non-taxable; will income in this case also be non-taxable and not added to my income ?

    Looking forward to your response.

    • Suresh says:

      Hi Arpit, If you are gifting sme amount to your wife, the returns on such gift amount would be clubbed with your income and would be taxed. It is immaterial whether the source of income is tax free or not.

  41. investerUser says:


    Thank you for your helpful post.

  42. Prasenjit says:

    Hi Suresh

    Is there any changes in currenct Financial year (FY-14) in the rule via which one could avoid TDS on Bank FD's by having multiple FDs in diffrener branches of same bank by ensuring that interest does not exceed 10,000/- per financial year.



  43. Vignesh. S says:


    I was planning initially for a Tax Saving option and an LIC Direct Manager approached me with this plan. I asked him for a short term (5 to 10 years) plan for Rs. 50000. He advised me this plan which he said that i can close this policy either 5th year or 10th year.

    I trusted him and took this policy. After few months only i realized that the policy was taken for 26 year for me and if i surrender i will get only 30% of premium excluding 1st year premium. I currently paid already for 3 years.

    So, I request someone to let me know, whether there is a possibility in this plan to close either on 5 / 10 years. Because, i got a different but better Life Insurance Plan which provide insurance for lifetime till 100 years.

    • Suresh says:

      Vignesh, what you took is ULIP. First year premium would be reduced or entire first year premium would be used by insura company as ULIP charges. If you want to close after 3 years, you would get 2 years premium only. Take a call. Refer our article on whether you can close ULIP’s. 

    • Vignesh. S says:

      Actually the policy name is new jeevan suraksha. It is a Pension Plan and not ULIP. Can you advice me?

      • Suresh says:

        Vignesh, I would not say it is bad, but all pension plans are like insurance-cum-investment products. The yield would be lesser than 6% p.a. You should consider taking term insurance plan + invest balance in mutual funds or atleast in Bank FD to get higher returns. This is my personal opinion

  44. Raghav says:

    Dear sir,

    Where to show interest on SB a/c less than 10,000/- in ITR-2 excel sheet?

    • Suresh says:

      Raghav, Interest on SB account less than Rs 10K is exempted from tax. If you have more amount, you can show under “Income from other sources”.

      • Kiran says:

        Dear Suresh,

        Is this exemption of SB interest up to Rs 10K in addition to standard deduction one gets from the IT income tax slab i.e up to Rs 2,00,000.00 ?

        Also should the individual sum up the interest earned by him/her across all SB accounts maintained (from different banks, branches ?).




        • Suresh says:

          Point no.1, Yes. Point no.2 Yes, the exemption is including all branches and all banks.

          • Kiran says:

            Dear suresh,


            Thanks for the response.


            In one of the response above you have mentioned FD interest up to Rs 10K is exempt, is this in addition to SB Interest.. or it is just total interest up to Rs 10K ?




          • Suresh says:

            It is total interest.

  45. Abhishek Roy Choudhury says:

    I am a Bank Emoloyee. In the current year I have worked in two branches of our Bank and so in 26 AS two branches have deducted TDS seperately with their two TAN Nos respectively but the Form 16 has been given to me by my present  Banker in which I am now working and in this the the TDS amount has been clubbed i.e. my previous branch TDS and the prseent branch TDS with mu present branch TAN No. Now what will I write in IT Return in the TDS Sheet where there is given TAN No of the Employer, name of the Employer & TDS amount.

    Please send me the reply.

    Thanking you,

    Yours Faithfully.


    • Suresh says:

      Abhishek, It is immaterial whether you have worked in on bank or its branches. You would get only one form-16 and you should submit the IT Return based on this.

  46. Swetha says:

    I am a housewife .I recently withdraw Rs 400000 from PPF.I am planning to keep it in the Fixed Deposit.Please let me know if it is taxable.Interesrt earned from FD.

    • Suresh says:

      Swetha, FD interest is taxable. Any reason why you have withdrawn from PPF. Any returns from PPF are not taxable, it would have been better place to get tax free returns.

      • vipin says:

        Hi suresh,
        I have a query. I have a fixed deposit with a bank. For F13 I took interest certificate from the bank. This shows rs. 12064 which i am supposed to show as other income in IT return filing.When I demanded TDS certificate bank officials said there was PAN Submitted hence TDS ( Rs.2413) @ 20% has been deducted and no TDS certificate will be issued.
        Kindly let me know how to show income and TDS IN return filing
        Thanks in advance

        • Suresh says:

          Vipin, Banks cannot refuse to give you TDS certificate. All banks would send automated TDS PDF copy every quarter to registered mail ID of FD investor. You can also take interest certtificate wherein it shows TDS amount. When you file ITR online, system will pull TDS amounts automatically from bank and it would show that you paid tax. You need not worry if you do online ITR. But if you do offline ITR, consider interest certificate.

  47. Vignesh. S says:

    One More query. If i submit form 15H for my mother, even if the deposit is of large sum like 15 Lacs, the interest will not be captured, is it right?

    • Suresh says:

      Vignesh, if you submit form 15GH, you need to update your income. Based on this necessary tax would automatically deducted. If you have not included any tax, 10% TDS would be deducted.

  48. Vignesh. S says:

    Hi Suresh,

    I am a Physically challenged tax payer. I am claiming 80U. My wife is a house wife and no income for her.

    1. So is it possible for me to invest on her name and avoid TDS for FDs.

    2. How much i can invest on her name and get TDS waiver if is submit form 15G.

    3. Is it possible for me to claim 80DD while submitting income tax filing for her, if applicable.

    4. Excluding 80U, is it possible for me to show the loss of income for my medical expenses, somewhere else in my Income tax filing.

    5. Am i still be able to claim 80DD for my mother, while submitting the income tax filing.

    6. My mother retired this May, and getting her settlements of DCRG and Commutation in Bulk. Will the tax be captured by the Pension office itself, or the amount will be paid, and we have to pay the tax in IT?

    • Suresh says:

      Vignesh, here are my comments.

      1. So is it possible for me to invest on her name and avoid TDS for FDs.

      Suresh: If you invest in your wife name, the returns would be clubbed under your income and necessary tax would be applicable. You should be able to prove that the FD done by her is thru her savings and you can submit IT Return on her name and reduce tax burden. 

      2. How much i can invest on her name and get TDS waiver if is submit form 15G.

      Suresh If you submit form 15G, bank would not deduct any TDS

      3. Is it possible for me to claim 80DD while submitting income tax filing for her, if applicable.

      Suresh: Like I indicated if your wife has seperate earnings, PAN card and able to file IT returns, she can claim thru 80D dependants  medical treatment.

      4. Excluding 80U, is it possible for me to show the loss of income for my medical expenses, somewhere else in my Income tax filing.

      Suresh: You can claim upto specific amount and you cannot carry forward excess expenses to next year.

      5. Am i still be able to claim 80DD for my mother, while submitting the income tax filing.

      Suresh: 80D is towards health insurance premium, you can still be able to do that as she is dependent for you.

      6. My mother retired this May, and getting her settlements of DCRG and Commutation in Bulk. Will the tax be captured by the Pension office itself, or the amount will be paid, and we have to pay the tax in IT?

      Suresh: Proceeds of pension amount for Govt employees is exempted from tax. However for non-govt employees who receives gratuity, 1/3rd is exempted from tax and for others, 1/2 is exempted from tax. She can declare the same IT Return and necessary tax needs to be paid. My suggestion is consult a tax auditor before proceeding to get more clarity about tax benefits for  various types of amounts she is getting thru retirement.

  49. Yogesh says:

    Hi Suresh

    This year I earned 11000 by way of interest on Term deposits. My back deducted TDS @ 10% on 11000. I think bank should have deducted TDS on interest above 10000.

    Now while filing ITR do I need to show 11000 as income from other sources or just 1000 (11000-1000)?

    Thanks … Nice article :)


  50. abhay says:

    Hi Suresh,
    While searching for my query’s answer. I went through ur blog and like it.. just a small query if u can help me would be really beneficial for me.
    Every year I save 60000 for my tax saver fd (monthly 5000) since last 2 years and this year bank deducted tax… earlier it was my impression that in tax saver we can save my tax but looking to this I think I was wrong…. I dnt think saving as fd every month is a good idea.. please correct me if I am wrong. Also if yes then what should be the other savings which we can do on monthly basis….
    Thanks !

    • Suresh says:

      Tax saving options and Tax free investments, both are differnet. Tax saving FD is one where you would get tax benefit in your income tax under 80C. However any income coming thru this FD is taxable. On the other side, tax free investment is one where your return is NON taxable. If you invest in PPF, you would get tax benefit under 80C (income tax) + returns are also tax free. You can invest some amount every month in PPF and you can invest upto 12 times in PPF.

  51. Raj says:

    Dear Suresh ,

    Your blog is very useful and informative. Pls keep it up.

    I hv 1 query..

    My mother is retired and is senior citizen. her interest on fixed deposit is 4 Lakhs for financial year 2013-14 . So she has taxable income of 1.5 Lakhs. How and where she should invest to save income tax. Thanks in advance.


    • Suresh says:

      Rajshree, you have posted a query on 19th June, and looks I already answered. Is this different, ok, here are my comments. If she has health insurance or life insurance, you can pay that and claim necessary deduction from total taxable income. Also she can invest in Senior citizens Saving scheme of FD and claim under section 80C. 

  52. sushma says:

    Hi Suresh,

    I am working in private company, from january 2012 till present.
    my annual salary is Rs 2 lakhs, every month Rs 1667 is deducted for tax, every quater
    TDS certificate is given along with form 16a. so can i file for income tax return.



    • Suresh says:

      Sushma, Something wrong. If your annual return is Rs 2 lakhs, why tax is being deducted by your company for Rs 1,667. IT would not be applicable upto Rs 2 lakhs. Pls check with your employer. You can file IT return online thru this link.

    • Yogesh says:

      Hi Sushma
      Please see in form 16A under which section they are deducting tax. If it is 194J it means they are giving you 'Professional income'. They are deducting TDS correctly at the rate of 10%.

      You can file ITR-4 i.e for income from business and profession. You will get your whole TDS back as there is no Income tax till 2 lac.

  53. ASIT KUMAR says:

    Hi Suresh,

    Your blog is absolutely rocking & is very useful for others Can you please help me out with my queries . 

    I have plan for FD of INR 10,00,000 in a Bank. The total interest I'll get INR 90,000 in a year. I will submit PAN card &  form 15G.

    How much  will I get  after deduction of TAX in a year.

    Please advise which option is  better to avoid tax. If I put full amount on one bank  or if I put 2,00,000 each on 5 different banks.

    Thanks in advance.



    • Suresh says:

      Asit, Bank would deduct 10% and pay you 90% of tax. Means they would deduct Rs 9,000 (10% of Rs 90,000) and pay you Rs 81,000. Pls note that the interest income needs to be added to your total income and you need to pay tax as per your income tax slab. It is immaterial if you invest in 5 different FD’s or 5 different FD’s with 5 different banks.

  54. Jyothsna says:

    Hi Suresh,

    Last financial Year I worked in 2 different companys and got two form16.

    I filled the ITR excel sheet and I could see balance tax payable in it.

    Please kindly let me know how to proceed further.

    First do I need to pay the tax and mention the same in returns or is there any other way.

    • Suresh says:

      Jyothsna, Any balance tax payable should be paid first and should be attached to ITR during filing. If you are doing ITR online, you should make the tax payment first through any authorised bank and fill the ITR with relevant tax details. You should submit ITR only after tax payment. 

  55. Hiren says:

    Dear Mr. Suresh,

                      I have 3 questions.

    1.) I was employed in April to June 2012 last year & my TDS was cut by company. After june 2012 i am not working in any company. I have the form no. 26A  so can i fill the return form by this form 26A without form no. 16?

    2.) My mother has made FD of her after retirement amount on father's name and interest is being added in joint account of my parents. Interest is more than 100000. In the account name my father's name is first. Can this interest amount be added in my father's return form? 

    3.) If efiled return can be modified or edited?

    Thanking You in advance for your precious time & golden advice.

    • Suresh says:

      Hiren, Looks you have posted your IT Return comment on wrong article. No problem, Here are my comments 1) You can file IT Return without Form-16. You need to have details to fill your IT Return, Tax paid etc. 2) I could not understand your logic about adding the interest in father’s name. Is your mother taxable income exceeding the exemption amount ? Yes, since they are joint holders, you can add to one of their income 3) You can modify the IT return online before the commencement of subsequent financial year. 

  56. mahesh namjoshi says:

    I saw your blog today and I liked it very much.  Your answers are to the point.  

    I am consultant in one private company and doing translation job. I getting salary after deducting TDS 10%.  As a consultant, what deductions I can claim to file return and get refund from TDS. I also do translation at home and get small amount.  Yearly I pay around Rs.50,000/- in LIC policies. Mediclaim of around Rs.7,000/-.  I have taken NSC of one lac rupee.  Pl guide me how I can get refund of TDS amount. 


    Mahesh Namjoshi



    • Suresh says:

      Mahesh, You should check these points 1) I hope you have considered HRA exemption limit when you submit the tax declaration in your company payroll system? If not, you need to consider that 2) You have already invested Rs 1 lakh in NSC, hence your LIC amount cannot be claimed additioinally over 1 lakh in 80C. I hope you have taken this before the financial year and the tax would have computed by company 3) Mediclaim you can claim and reduce from your taxable income. I hope this too would have been taken before 31-Mar-2013 and considered by your company. You need to check whether your company has taken such exemptions into account before deducting 10% TDS. Also you said consultant and salary. Consultant would not get salary, they would get only consultant charges where companies would deduct 5% TDS. Pls check this. 

  57. DILIP says:

    Dear Suresh,

    Please clarify on the following aspects on Gift and the Tax.

    If I distribute the 5 Lacs each to wife, son, daughter in law from my capital.Now they invest in the F.D. Everybody income is nil and they have PAN cards but never filed any return as they donot have any income. Now after puting the Gift amount in FD and if they get the interest which is more than 10000/- but their income is less then 2,00,000/- please give clarification :

    1. Can they fill 15 G form so that TDS not deducted ?

    2. Can they show the interest received form FD as their income and file the return ?

    3. As I had given gift to them so is the iterest earned by them on FD will also became my Income ?


    • Suresh says:

      Hi Dilip, Point no.1 and 2 are “Yes”. However, if they are able to prove that they have saved the money in FD thru their other savings, it would be good. Else it would be clubbed in your income and income tax needs to be computed.

    • Vijayan A says:

      Hi Suresh

      Your articles are simple,focussed and action oriented. Pl keep it up. I have a question pl –

      I am on 30% tax bracket and have short term FDs which i kept extending.Meaning I never withdrew the interest amount but only continued the FD with the interest amount earned. Pl let me know how to declare this other income correctly for interest as some interest amounts were were in last FY and some current FY. I have Form 16 separately for my salary income. Thank you in advance.


      • Suresh says:

        Vijayan, Two ways of doing it. 1) If you update your bank FD passbook, it would indicate date wise interest credited. Bank also would indicate how much Tax deducted. With this you can pay balance tax 2) You can ask bank to give tax statement of last year. They would provide a statement which contains the interest credited + tax deductd thereon. Compute the tax as per your income tax slab and pay balance tax online with any authorised bank. When you file IT Return, consider the details in Form-16 + Other income(Bank interest) and Tax paid by you seperately so that your balance tax payable would be zero in the return. In case you like our articles, please do share some of the articles with your friends on Facebook or email, who might be looking for similar info. Knowledge sharing is always good.

  58. RAJSHREE says:

    Hi Suresh ,

    My Mother in law is Senior citizen. She is getting interest on fixed deposite 2.6 Lakhs. Her income tax slab is 10%. so 10000 is taxable for her. Can she avoid income tax by saving some amount. How much she should invest to save 10000. Where????

    • Suresh says:

      Hi Rajshree, Does your mother-in-law is paying for health insurance of life insurance. If yes, you can claim this and you need not pay tax on Rs 10,000. Alternatively you can invest Rs 10,000 in senior citizens saving schemes FD (in any bank) and get little lower rate of interest and get deduction under section 80C for Rs 10,000. In such case you need not pay any tax.

  59. Amit says:

    Hi Suresh!

    Last financial year i filed my ITR, But this whole financial year i didnot worked and due to that i donot own Form 16, except i have one FD with bank and for which TDS has been deducted by bank. I want to file the ITR, How can i proceed with as no Form 16 for this current financial year..

    Is it possible to File ITR without owning form 16.




  60. ramesh says:

    i am in 30% tax braket. i have bank fd  and given pan to bank. they have deducted 10% on interest. now do i need to pay rest 20% as more tax? if yes how can i pay that?

    • Suresh says:

      Ramesh, You can pay thru online from ICICI or bank of India or any other bank who accepts online payment. Once you pay, you can either go thru agent or file income tax return online by providing the balance tax paid receipts. 

  61. heera lal dak says:

    hi suresh , i have asked a question on 14th june regarding FD interest , but reply still awaiting.

    • Suresh says:

      Heera, I am clearing one by one. There are 100+ messages on my blog and 125+ emails to my mail ID in the last 5 days asking such queries and hence the delay. I hope you understand.

  62. Sudipto Choudhury says:


    I fall under 20% Income Tax bracket. I have some FD in bank and bank has deducted TDS on FD interest @10% .

    Thus, I still have the liability of paying the other 10% (+ educational ces) as tax. right?

    I have also calculated how much the amount in INR should be.

    Now, the question:

    1. Where, though which Form should I pay this as tax considering my company has already submitted TDS for March 2013 and now I am in a different Financial Year?

    2. Which Form Number? Can this be done online? 

    3. I am ready to submit IT Return. Should I wait till I pay it?

    4. What's the name of this tax? "Interest Tax?"

    5. Now that my tax is for FY 2012-13 and its a different FY, how to pass this information before submitting the form so that tax is submitted for correct FY.

    Thanks for your help.








  63. Hareesh Mangalam says:

    Dear Suresh,

    My bank had credited my account with Rs. 7,830/- as interest on Tax Savings FDs and had deducted TDS @ 10% on this amount too. I know i should show this amount as 'other income' as interest. But while submitting IT returns, can i show the amount of Rs. 7,830/- as amount re-invested as 'Tax Savings FD' since it is compounded to my existing FDs and is not paid to me?


    Hareesh M


    • Suresh says:

      Point no.1. Since your FD interest has not exceeded Rs 10,000, bank should not have deducted TDS. Pls check with bank. 2) If you have re-invested the amount for Tax saving FD, the amount needs to be shown under section 80C upto Rs 1 lakh.

  64. Kiran says:

    Dear Suresh,


    Good and very infomative article also its good to read your responses which are very clear.

    I'm an NRI having an NRO FD with a Nationalised bank, the interest from this FD is creditted to my wife NRO savings account, could you please advise if the interest amount will be considered as an income for me or my wife for income tax purpose.

    Appreciate your response.





    • Suresh says:

      Hi Kiran, NRO account, interest is taxable. Bank would deduct TDS. However please show the income in your wife IT return and show the TDS deductd by bank. Any adjustment (excess or less paid) need to be arrived based on that.

  65. K. Subramanyan says:

    Dear Suresh,

    You  have stated-


    " Submission of form 15G: In case the investment is done in the name of a spouse whose total income including the interest income is not exceeding the total taxable income, then your spouse can submit Form 15G to bank so that bank would not deduct TDS. "



    Query 1:Kindly clarify whether this will attract  tax under ' Income Clubbing Provisios'?

    • Suresh says:

      KS, If your spouse has PAN card, you can show her income seperately and file ITR. If you are able to do these things, you can go ahead and submit Form15G and tell bank nor to deduct TDS as her total income is not in taxable limit. However if you are not doing these things, you need to club her income into your income and tax computation would be done.

  66. heera lal dak says:

    please let me know whether interest paid on loan against bank FDR  be deducted from interest earned on same FDR for the calculation of IT

  67. Neelam says:

    Hi Suresh,

    Could you let me know what are the different ways to save tax other than donations,charity& 80C,& let me know how to save atleast 200000 per annum..i really have no idea of it could you please help me regarding this

    • Suresh says:

      Hi Neelam, Let me do some more research on tax saving options and would provide comprehensive list to you next week. 

  68. Vinai Singh says:

    Dear Suresh,

    I am a UK and US national who was previously an expat in Bombay and had opened up both NRO and NRE accounts.  I am planning to deposit between Lakh 5 and Lakh 10 in both accounts shortly as a FD.  Can you advise which account, presuming that I will not be returning to India, can I despoit into and not have to pay TDS (as I dont live in India anymore).

    Many thanks,

    • Suresh says:

      Vinai, NRE account-Interest is tax free i.e. no income tax. However NRO account the interest is taxed and bank would deduct TDS.

  69. suresh says:

    Suresh sir

    first of all i like to thank you for posting such an informative article and consistantly answering queries 

    sir i have a question my father expired last year in november as i the only son with no other brother sister and mother died many years ago and i have inherited 50 lakhs  from my father and want to make that into fd by investing into multiple fd and right now i m currently jobless so can i submit 15g form and in the end of present financial year whatever interest will be generated i can pay after deducting 2 lakh limit because if i dont submit 15g bank will deduct 45k for 1 year fd of 50lakh . am i eligible for 15g or any other option?

    • Suresh says:

      Suresh, When you submit form 15G, they would ask for previous year income. You can indicate the same and check with bank about your current income position. They should be able to update this, but since since the income is crossing Rs 2 lakh, they would surely deduct TDS of 45K. You can check with bank for any other option of updating form 15g, else you can claim the refund through IT Return. Alternatively invest Rs 1 lakh in tax saving FD. Then you can get exemption upto Rs 3 lakhs (Rs 2 lakhs basic exemption and Rs 1 lakh under 80C). 

  70. balaji says:

    Hi Suresh,

    I have FD of 2 Lakhs and given PAN details during deposit.  But bank fail to update PAN and deducted 20% TDS.  Bank gave a statement stating the interest paid and tax deducted. (Form 16 A is not given)

    How do I file IT returns and claim refund without Form 16 A.  Please advice.


    • Suresh says:

      Balaji, You need to check in which tax bracket you would fall. If you fall in 20% IT bracket, you would not be able to claim this money. However if you are falling in 10% tax bracket or your interest income is not taxable, you can file the ITR by showing the interest income under your total income and compute the tax. If you update tax paid details, it would show excess Tax paid and you would get tax refund. You can either file ITR online or thru tax consultant.

      • balaji says:

        Hi Suresh,

        Thanks for your reply.   I am under 30% IT slab.

        I have declared this interest income & 10% TDS and accordingly company has deducted balance tax from my salary.  Since bank has deducted 20%, I need to get refund.

        Bank has not given Form 16A, without Form 16A how/where can I give this information in ITR 1.(as I don’t have the unique TDS certificate No.)


  71. julee kakoty says:

    my husband was an employee in a company and he expired on 28th august,2012. I got some money from company which i fixed in bank as fixed deposit. I went to submit the 15-g form in the bank for the last year in April,2013 but they didn't take it at that time as a result of which i have to give income-tax altough i have no income at all. And what shall i do to get the deducted tax I had given for the half year??

  72. PRANAB says:

    My FD interest was 37000, as PAN is already submitted, TDS was 3700 and form 16A is issued. My salary is aprox 10L+ and hence, income goes to 30% slab. I understand my tax pable will be 30% on 37000, not 10% which bank deducted as TDS and I need to submit additional amount as challan. Am I correct?

    • Suresh says:

      Hi Pranab, You are correct, compute the amount and pay the income tax. When you file IT return, show your form-16 + statement of tax paid by bank + the additional tax paid by you. 

      • PRANAB says:

        Dear Mr. Suresh, thanks a lot for the carification. his is for the FY 2012-13, I got my F-16 from bank only 3 days back (on the same day I wrote to you), when I came to know the amount deducted was 10%, not 30%. Could you kindly tell me, which challan form I should use to deposite tax online. 

        • Suresh says:

          Hi Pranabh, it is form-282. You can download the form from this link.

        • bemoneyaware says:

          To fill balance tax you need to fill Challan 280.

          Assessment Year: 2013-14

          Major Head : 0021 : INCOME-TAX (OTHER THAN COMPANIES)

          Type of payment : 300  for SELF ASSESSMENT TAX

          no Surcharge for FY 2012-13 and education cess is 3%.

           For example: So if total tax payable  Rs. 10,000(including cess), the Income Tax component is (10,000 / 1.03) i.e. Rs. 9,709, and Education Cess is Rs. 291 (3% of Rs. 9709).

          If it's total tax payable is without education cess then add education cess to it.

      • Rakhi says:

        Hello Suresh, I have few related doubts: 1) If I have muliple FDs in same bank such that individual interest < 10,000 but total interest across all FDs is > 10,000, should I be paying tax? 2) If yes, then should tax be deducted on total interest or total interest – 10,000? 3) If FDs are in reinvestment scheme such that no interest is credited monthly/quarterly/yearly; instead interest is compounded to the prinicipal amount on quarterly basis by the bank itself, should I pay tax yearly or only when I get the final maturity amount? Thanks.



        • Suresh says:

          Rakhi, 1) Multiple FD’s would be clubbed to check the interest limit of 10K. 2) tax would get deducted on actual interest exceeding Rs 10K 3) Interest would be credited to your deposit account every year, hence you would know the interest amount. You should pay yearly tax based on this. You can pay thru any bank thru online and indicate in IT return

  73. Sankarson says:

    Dear Mr. Suresh

    1. I plan to Fixed (Re Investment Plan) INR 400000 for 10 yrs in nationalized bank India, please advice should i need to submit Form 15G in every year or only one time i need to submit once i open FD.

    ** I have another FD 1400000(interset 1.5l pa so accumulative amount not exceed 200000 pa)

    2.or  IF I open FD under My wife's account (I'll transfer 4L to wife's account from my acc, She got PAN card & she is homemaker) so the interset will be tax free or not , I just read an artical in  Economics time paper they mention the interset will taxable as i give money to my wife , but it's heard to beleive for me so i need your opinion , 

    Thanks in advance.. :)


    • Suresh says:

      Sankarson, Yes you need to submit form15g every year. The reason is when you submit such form, you are declaring your previous income and your income can change every year. 2) If your wife have a pan card, you need to file IT returns every year. However amount upto Rs 2L would be tax free, beyond this, necessary tax needs to be paid after 80C or any other applicable deductions.

  74. vinod khanna says:

    I had done short term deposits with punjab national bank on behalf of my company as it is their annual practice.The bank deducted tds of Rs 7691 and provided us with form16A.Is there any way that my company can get this money back? Kindly help

    • Suresh says:

      If the ST deposit is done on your name as an individual and if you add the interest to your income and compute tax, and eligible for refund, you can file IT refund and get the refund

  75. mahendra says:

    Dear sir

    will you please advise me we have 1.50 Lakh FD on SBI bank for 1 year each FD is 50 thousand and all three FD date is issuing date 8.6.12 & maturity date  8.6.13 i am all reedy submit Form 15G at the time of summations but today will deducted TDS amount.

    So please help & suggest me


    Thank you

    • Suresh says:

      I think you need to submit for all your new FD’s. Since your earlier FD is matured, you are opening new, you should do this.

  76. Nagaraj says:

    Hello Sir,

    I have a question. Basically, I am a Tax payer, and from last 5 years, i am paying Tax. Also i have kept some money in Bank Fd and interest is crossing Rs.10000. And bank has also done TDS on Interest. After filing Returns for this Financial years, will i be getting back the money which was cut by Bank as TDS? Please explain the same.


    – Nagaraj

    • Suresh says:

      Nagaraj, If you file IT returns, you would indicate what is your income, Bank FD (Other income) etc., with this, the actual tax amount would be computed. You also indicate what tax you paid. If your tax paid is more than tax liability, you indicate as refund. If tax verfiication officer verifies this and found correct, you would get IT refund through cheque or the refund amount would be credited to your bank account (provided in IT return).

      • Nagaraj says:

        Thanks Sir for the reply.  This year i have paid tax around 15000 ( My salary income is 5,00,000).

        And TDS for FD is around 5000 rupees. What will happen for my case?

        • Suresh says:

          Nagaraj, when you file IT Return, you indicate the exemption to be received upto Rs 10,000, hence the TDS paid by you for RS 5,000 should be refunded. Consult your tax consultant so that he would fill the IT return form appropriately.

          • Nagaraj says:

            Hello Sir, 

            Thanks alot for the feedback, I'll file my returns accordingly :)

            Ur help is much appreciated Sir.

            – Nagaraj

  77. Rishi Mohan says:

    Dear Sir, 

    I want to know that if I open a FD account for three years and total(3 years) interest income is more than 10,000 then tax will be deduct  for total interest  income or for per annum interest income that is not under TDS?


    Rishi Mohan

  78. mamta says:


     opened a savings account in the name of my wife (Housewife), where i transfer some amount monthly, for being invested in a Recurring Deposit. My wife is the sole holder of that savings account. How would the tax be calulated on the interest we get on maturity of the RD (duration 14 months)? Will the interest income from the RD be clubbed to my income?




    • Suresh says:

      So the RD is in your wife name. If your wife has PAN card  and you have submitted to bank, they would deduct 10% as TDS beyond Rs 10,000. The interes income would be updated in your wife bank RD passbook. Please check that. This inteest should be shown as “Other income” in your wife IT Return and necessary tax needs be computed. If excess tax is deducted by bank, it would be refunded by IT dept.

  79. Nishant says:

    I earn around 8 Lakh per annum and want to open 2 FDs in different banks (both offering over 10% rate for 300 days) in my moms name who is a housewife (not a senior citizen) . 

    My FD will be less than 1 lakh Rs. each so that the interest amount remains less than 10000 in both the FDs. 

    Since my mom is housewife, and FDs will be opened in her name, will it be a good idea to save tax?


    • Suresh says:

      Regd FD on your monther name, if she has PAN card, bank would deduct 10% TDS, else they would deduct 20% TDS. Hence if you invest Rs 8L @ 10% (assuming), she would get Rs 80K. Since 10K is exempted and 70K would be taxed. Now if she has PAN card, her basic IT exemption would be upto Rs 2 lakhs, hence she need not pay tax. You can submit form 15G to banks saying she is not under taxable income so that bank would not deduct TDS. You can file IT return with nil as taxable income and no tax is applicable :-) 

  80. Srinivas G says:



    I was under the impression that TDS will not be made by Banks if I submit Form 15G.  But TDS was made on the Interest on my FDs stating that it has exceeded the maximum limit.  Is there any such maximum limit and if so what is it?  Is there any exemptions / relaxations for the maximum limits?  Please advise me.

    • Suresh says:

      Hi Srinvas, Form 15G is submitted to declare from your side that your total income is less than basic exemption of Rs 2 Lakhs (FY 2013-14) and you are not liable for tax. But if your total income has exceeded this basic limit, you are liable for tax. Please check your 15G declaration. You would know the reason for this.

  81. Dr Vipin says:

    Dear Sir,

    Wonderful article. I have two queries:

    1. My office has not deducted TDS properly. Now i have to pay penalty and intrest on less TDS. Is not this the responsibility of office? Is there some provision to get penalty and intrest from employer?

    2. Interest on FDs is >Rs  10,000  say  Rs 18,000 should we show Rs.8,000 as income from other sources or the whole amount Rs 18,000?

    • Suresh says:

      Hello Dr. Vipin. 1) Your office is supposed to deduct TDS. However in case they do not comply with this, it is the responsibility of the individual to ensure that necessary tax are paid. I have through other professional tax consultants blog to verify my statement, hence there is nothing left, except you need to proceed and pay penalty. If possible, try to collect this from your employer 2) Beyond Rs 10,000, you need to add balance to “Other income”. Means Rs 8,000 would be added as other income.

  82. Revathi says:


    I forgot to submit 15G and they have deducted TDS. My only source of income is bank interest. For getting the money back i have to file income tax returns. Please let me know which form i should fill ITR-1 or ITR-4S?



  83. smt. chinu paul says:

    dear Sir,

    I,m a lady senior citizen. Against my several FDs in a branch of a nationalized bank, I submitted a 15H form(proof is there with me) against my one ID. Still bank had deducted TDS. When inquired, the bank verbally intimated that theTDS had been deducted against another ID for which 15H was not submitted. My question, whether a client could have more than one ID- remained unanswered by the bank. I solicit your opinion and guidance for follow-up action.

    Thanking you in advance

    with regards

    chinu paul

    • Suresh says:

      Hi Smt. Chinu paul, When you submit the Form 15H, it would ask for “FD Account number”. If you already have multiple FD’s, you should indicate all of them under that, else banks can always come back and state you have not indicated in the form. As per my knowlege, nationalized banks have not automated this process. Please file IT refund request and you may get money back, but it may take upto 18 months.

  84. Akash Gaur says:

    Dear Sir,

    I am planning to go for 100 FDs of 20,000 each for 8.3 years. the amount I will receive on maturity is of 40,00,000. So this amount is after the deduction of tax or I need to pay off the tax when I receive the maturity amount. The reason for going for 100 FDs is just to avoid the tax as someone told me that. Please clear this doubt of mine. and also suggest me some good scheme either be insurance or Post office scheme in which I get a handfull of amount and need not pay the TAX.

    Thanks in Advance.

    • Suresh says:

      Some one gave you incomplete info. You need to create 100 FD’s in 100 different banks so that banks would not deduct TDS. If you invest vavrious FD’s in a bank, they would consider them as single and TDS would be applicable. However whether you invest in one bank or 100 banks, returns taxable in your hands and added to your total income. Please see this article about best tax free investments you can invest where tax would not be deducted on your returns.

  85. Devang Patel says:

    Dear Sir,

    I have 25 shares of GNFC which is on the name of my father who was kidnapped 15 years ago & still he is not present among us. Now I want to transfer these shares on my name but the problem is what that they demand the death certificate of my father & his signature, which is not possible & we tried a lot but we can’t get the death certificate of my father.

    So now what I should do to transfer these shares on my name???

    Kindly provide the guidance.

    • Suresh says:

      Hi Devang, Have you approached an advocate ? There is a process to be followed to transfer shares or property from father to son.

  86. A.K.Johari says:


    I clubbed my Wife's fixed deposit income with mine and deposited income tax at the same time Bank also deducted income tax on Wife's FD. As bank will issue tds in Wife's name/PAN- How to claim  Tax return on clubbed income by me in my ITR since TDS is deducted in my Wife's name.

    Look forward for advice.


    • Suresh says:

      Hi Johari, As per my knowledge, there is only one way to handle this. 1) File your ITR and show excess tax paid and claim for refund 2) File your wife’s Income tax refund which shows correct tax deducted. 3) In case there is any difference in the income tax computations done by bank  Vs what you computed and paid the tax, the differential amounts of tax should appear in both these ITR’s. 

      • A.K.Johari says:

        Sir, Thanks for your reply. I need further information that since i was clubbing wife's income with me as she is house wife, now to file separate ITR, how to club her Tax liability as mine in my ITR then?



  87. Anand says:

    Hi Suresh,

    I have no questions for you as of now. But just wanted to thank you for the service you are doing by answering almost all questions asked by needy people. I really appreciate your service in this regard, it takes lot of commitment and care towards society, and you have shown it through helping people with your knowledge. 

    Thanks a lot again on behalf of all the people.


  88. Devang Patel says:

    Dear Sir, I have purchased IIFL NCD of one lac, from that I get 1062.00 Rs. of interest on every month, but this time they have deducted the tds amount from this intrest income, so what i have to do is?

    Will they deduct the same amount of TDS every month? Can I get this TDS amount refund?

    Kindly provide the guidance.


    • Suresh says:

      Hi Devang, they would deduct TDS. If your income is withint taxable limit, you can claim this in your Income tax return and you can get IT refund.

  89. Naresh Kumar says:


    If interest income is more than 10,000 from savings bank account, bank do not deduct tax at source.What should we do? 

    1. declare excess income in return and pay tax    or

    2. do not show in return the interest income and save tax

    Please advice




    • Suresh says:

      Hi Naresh, Any interest in excess of RS 10,000 in savings bank account is taxable. It is better to declare in IT return and pay necessary tax. 

  90. Saju says:

    Dear sir,

    If the FD is in the name of a monor (sole holder)

    1.whether the interest will include in the income of gaudian?  

    2.if not whether the tax is applicable on the interest?

    • Suresh says:

      Saju, Any income earned by the minor would be clubbed with income of guardian and necessary tax is applicable. 

      • bemoneyaware says:

        Just to add to what Suresh has said you can claim an exemption of Rs 1500 per child on clubbing of income of the child with the parent i.e from the interest earned from FD you can subtract 1500 and pay tax on the remaining interest

  91. ejaaz ahmed says:

    Hii, I am an NRE. I plan to invest in fd in an NRE account. If my interest comes around 5lakhs, would it be taxable?

  92. Ashim Kumar Das says:

    Dear Suresh

    My father in law never filed tax return. He is a farmer who has FD in a bank. Bank has deducted TDS already and told him to file his return to get back the TDS. My question is which ITR he should fill for this case??

    Thank you in advance for your reply.


    • Suresh says:

      Hi Ashim. Pls follow this process. 1) Your father-in-law should have PAN card, if not you need to apply now. 2) Ask him to file the IT return (if required take a tax consultant help in filing the return) by adding the FD interest and compute the total taxable income. Since he is a farmer, you can show appropriate income and it may be below taxable limit of Rs 2 lakhs. 3) When you file IT return, it indicates that interest is deducted and needs to be refunded. 4) The refund can come anywhere between 1 to 1.5 years after filing the IT return.  5) It would get credited to bank account specified in IT Return.

  93. Daniel says:



    I have a 5 lakh fd which will be matured on july 1, the maturity amount is 5.5 lakh. Will i get the tax deducted automatically on the 50k and then the remaining will be given to me. I have opened an online FD in HDFC. my income is more than 10 lakh, how can i save TDS on it, my wife has a pan card and does not have a job, can i show that amount on her name or submit her form 15h to avoid tax or get the TDS back. Is there any alternative ? that FD on my name by the way. Please suggest how to get the tax back. I am worried that they wll deduct 15k now on my maturity amount (30% tax on 50k = 15k). Am i right ?



    • Suresh says:

      Daniel, If you have not submitted Form 15H, tax would be deducted. Since the FD is already made by you, you cannot show this amount on your wife name. Pls note that bank would deduct 10% TDS amount if you have submit PAN else they would deduct 20% TDS. You need to show the interest in “Other income” and pay necessary tax as applicable in your income tax slab. 

    • arun kumar says:


      Is the exemption limit for tax on interest upto Rs.10,000/- applicable for savings bank account or for fixed deposits or recurring deposits also? I come under the purview of 20% slab. My interest from fixed deposits is more than Rs.10,000/-. I prefer to pay tax on interest through govt.Challan. In this context, I submit form 15G to the bank. Is it appropriate? I have to calculate tax on interest @ 20% only or plus educational cess whatever? My annual interest from bank deposits is Rs. 20,000/-.For how much amount I have to pay the tax. You are requested to kindly guide me.

      With regards

      arun kumar

      • Suresh says:

        10K exemption is for all FD’s. You can submit form15G and declare your income. If your taxable income excees Rs 2 L limit, bank any way would deduct 10%, balance you can pay through online banking and indicate the same in IT Refund. You need to pay tax in excess of Rs 10,000 only along wiht educational cess of 3%. e.g. If you got Rs 11,000. then Rs 1,000 x 20% + 3% of 1,020

  94. uday says:

    Q- bank deducted tds on FD Interest after Issue him TDS Examption certificate.


  95. Saju says:

    Dear Sir,

    I am still having a doubt that <10000 interest for FD (to pay TDS) meant monthly or yearly interest? Then what is this 2 lacs limit for exemption for TDS. kindly clarify to me. 

    • Suresh says:

      Hi Saju, Rs 10,000 is per year. Rs 2 lakhs I said is a total income tax exemption limit which an individual would get per year. Beyond this, an individual need to pay income tax.

      • Saju says:

        So I understood that if the monthly interest income is above about Rs. 833 TDS will cut automatically and to avoid this I should submit form 15G and then only I get the  2 lacs exemption.

        I am having pan card and I also want to know that this is applicable in co-operative societies and state govt. owned financial companies that I am maintening some FD with them also. As an NRI I am saving all this for my future benefit that I will loose my job at any time and also not a perment job and it is a contract job for limited period. So need your valuable advice to avoid any panic on the future in a jobless state.

        • Suresh says:

          The rule of TDS across banks is same irrespective whether it is cooperative bank or nationalised bank of private bank as all are monitored by RBI. Call the customer support now and get your doubt clarified in next minute.


    I have FD on the name of my entir famaily i got interest 2.50 lakh and i transffered the same to all my 5 family members can u please tell me the treatment of this income according to income tax  for all faimly members i have two son, one dughter and wife 

    • Suresh says:

      Hi Preet, The FD is in your name and you got interest. Hence the entire amount would fall under your name and you need to pay tax as per the income tax slab applicable for you. 

  97. Saju says:

    very good, informative and helpful

  98. Ashok Gulati says:

    My mother in law had the PAN but her bank account is older and does not have her PAN. Recently on maturity of her FD we came to know that 20% Tax has been deducted from interest earned. Can we use TDS Certificates without PAN to get the refund. Can we file return for previous assesment year for income with nil tax liability and get the refund

  99. Gaurav says:

    Dear Sir

    Thank you for a good article. My mother is not earning anything but having fixed deposits ans the interest goes above 300000. Is this possible to get 80 c in 1 lakh

    Please reply


  100. Godfrey Alemao says:

    Dear Suresh,

    I am an NRI based in Dubai. Have some FD's in a bank totalling INR 16 lacs @9.5% for 7 years! I do not have any other source of income in India! The interest is approx INR 150,000 per year? If I submit form 15G and PAN CArd, bank will not deduct TDS. What is the exemption limit of total income for me to not file returns?

    Godfrey Alemao 

    • Suresh says:

      Hi Godfrey, You can submit form 15 so that bank would not deduct TDS. Now if the taxable income exceeds the exmption limit of RS 2 lakh, you need to pay tax, else no tax. Also would like to know why you are not opening NRE account. Interest earned in NRE account is tax free. Please talk to your banker if you can open an NRE account now. If you like my blog, please give me a facebook like :-)

  101. sankarson says:

    Dear Mr. suresh

    1. I plan to fixed INR 1500000 in a Bank , The total interest i'll get INR 139000 in a year as i check & i will take intereset monthly basis (MIS), I have no extra income now (No other Job) & i have one LIC policy which i pay INR 36000 per year , so can you tell me if i file From 15G then if i need to pay any tax or not?? I have already update my pan card.

    2. 2nd i fixed INR 350000 in my wife's(she is home-maker) account for 120Months the total interset shown INR 502316 , So how much tax we need to pay for this ,

    Thanks in advance to you ,

    • Suresh says:

      Hi Sankarson, Point no.1, you can submit Form 15 and bank would not deduct TDS. Since your income is not crossing Rs 2 lakhs you need not pay any tax. 2) If you are investing Rs 350,000 in your wife name (ensure she has PAN card), the annual interest would be approx 30,000. You can submit Form 15 and there would not be any TDS. Since the amount is less than taxable income, you need not worry on that

  102. Paramesh says:

    Hi Suresh,

    Excellent blog. I'm living abroad and have NRE fixed deposits. Do I need to pay tax and file tax returns?


    • Suresh says:

      Paramesh, Interest receivd in NRE account is exempted from income tax. Pls see the RBI circular for ready reference.

      If you have taxable income above the exemption limit(Rs 2 lakhs for current fin year), you need to file return. Good to know that you have liked the blog. Please share one of your favorite article from my blog on your facebook so that your friends may also get benefitted. Please do let me know in case you need any further help.

  103. kundan kumar says:

    i have done FD of 2 lakhs , i got interests more than 10000, i dint submit form 15G and i am a student.this is my only source of income. now u tell me can i get my tax money back,because it deducted around 70000.

    • Suresh says:

      Hi Kundan, Rs 2 lakhs investment cannot fetch Rs 70,000 interest. You can re-check. But once the TDS is deducted by bank, you cannot claim that back from bank as they deposit TDS every month into Govt account. You can do one thing. If you have a PAN card, when you file IT return, you can apply for IT refund. However it would take more than 1 to 1.5 years to get the refund. I am not sure whether as a student, you have a PAN card ?

      • kundan kumar says:

        sorry that is 7000 not 70000.

        ya i have pan card.

        may i file ITR?


        • Suresh says:

          Kundan, Recent news is that from this financial year, you need not file ITR if your income is less than Rs 5 lakh. Please check your total income and proceed.

          • kundan kumar says:

            hi suresh
            already i told u i m student my total income is that much 25000 in a year.
            now u tell me what cai do?
            tell me full procedure sir

          • Suresh says:

            My dear friend, Pls follow this process. 1) File the IT return by adding the FD interest and compute the total taxable income. Since you are student, there would not be any other taxable income. 3) When you file IT return, it should indicate that FD interest is deducted and needs to be refunded. 4) The refund can come anywhere between 1 to 1.5 years after filing the IT return.  5) It would get credited to bank account specified in IT Return.

      • kundan kumar says:

        for getting return what i have to do?

        tell me full procedure, i m totally new in this


  104. ashok says:

    Dear Suresh,

              Your blog is absolutely rocking. It is very useful. I have sold my property worth 40,000,00 rupees. I am having a 50 percent mentally handicapped son who is married. My son is having the handicapped card and certificate also provided by State Government. He is not having any source of income. I am planning to invest this 40,000,00 in my son's name as FD for his welfare. Will he get any tax exemption for that amount.. 

    • Suresh says:

      Hi Ashok, There is no seperate TDS exemption for fixed deposits for mentally handicapped. You as a father or your daughter in-law, can claim Rs 50,000 to Rs 1,00,000 under section 80DD for income tax purpose.

  105. Nagendra says:

    Hi Suresh,

    nice article…

    I am an employee having taxable income in slab 3-5 lacs. and TDS is cut 2000 rs. by my employer in prev. finacial year..

    i have 2 FDs and interest is cut by 1600 rs. as interst is more than 10000rs.

    Please let me know if i can submit 15G form and get refunded.

    Am I eligible to submit 15G form. Please suggest.

    Thanks in advance!!

    • Suresh says:

      Hi Nag, I would answer your question in two parts 1) If Tax has been deducted by your employer for Rs 2,000 means your income has exceeded the taxable exemption limit. You can try to cut this tax by investing in 80C or under medical insurance or by way of HRA declaration. I am not sure how you have done that. 2) TDS on your FD is already been deducted by bank, hence you cannot submit form15G and claim the TDS which is already paid Govt. You can do that for future TDS amounts. However the interest needs to be clubbed to your income and tax needs to be paid by you.  BTW, how you have felt our blog .Do you have any suggestions to improve this. If you liked my blog, give me a facebook like.

      • Nagendra says:

        Thanks for your response….

        excellent blog…gave facebook like as well to follow this..!

  106. suraj says:

    Dear Sir,

    I am NRI,

    1.recenlty I have sold one property in India  and I want to put this amount in FD,but bank have told me that tax will be applicable on what will be the net interest rate that I might receive after deducting this tax.

    2.Is any tax applicable for the fd made out of money sending from aboard.

    • Suresh says:

      Hi Suraj, 1) Yes, what bank said is right. TDS would be deducted at 10% (if you submit PAN) and 20% if you have not submitted PAN. You can do an FD in the name of your spouse if she is not working and resident of India or on your parents name if they are not earning. Since these people fall under “relative” definition of IT act, there would not be any Gift tax. Also since they may not have any taxable income, you can submit Form-15 so that no TDS would be deducted. However in the IT Return, you can specify the interest and it would come below the exemption limit. 2) In case an individual is a non-resident, then only income received / deemed to be received or accrued / deemed to be accrued in India is taxable in India. Thus, broadly speaking, your overseas income would not be taxable in India, provided it is first received outside India

  107. manoj says:

    Dear Mr. Suresh ,

    My mother in low have a fix deposit of Rs. 150000 in bank. We have submitted form 15 H but bank has demaded PAN card but now she has no PAN card.(We will not able to use PAN card as someone use it(disputed matter).So it is advisable to premature withdraw FD to avoid 20% TDS.Are bank will deduct 20% on 150000 FD in advance ?It is possible to transfer this deposite to my wife name .(house wife and she has a PAN card ).



    • Suresh says:

      Hi Manoj, There are two questions here. Bank would deduct TDS on the interest earned for the month. It is not in advance. You can deposit this amount in your wife name. This is based on the assumption that Rs 1.5 lakhs has been gifted by your mother-in-law to her daughter (your wife). No gift tax is payable as your wife falls under “relative” definition as per IT act. However, when your wife files the ITR, she needs to include the interest rate and necessary tax needs to be paid on the FD interest received as per income tax slab. Since your wife is a housewife with no income, the interest which would be < 15,000 would be less than the taxable income.

  108. Akhil K says:

    Dear Suresh,

    I have a doubt. My taxable income is 700000. Last year I invested around 3 lakhs in various FD and got around 30000 as interest. So Bank deducted 3000 TDS and I have mentioned it all during IT Filing.
    But this year (12-13) I haven't re-invested that money and closed all the running FD. But thenever I got 6000 interest in a year. Now in my form 26AS I am seeing a deduction of 600 against TDS. As my income (interest) is less than 10000, bank should not deduct TDS.
    Please suggest if this is a mistake of Bank or I am not understanding something. Also please let me know if I have invested in FD in some other bank where the income is only 4500, is it needed to mention it in ITR as other income?

    • Suresh says:

      Hi Akhil, If your projected interest amount is less than Rs 10,000, yes bank should not deduct TDS. However your FD’s were supposed to run. Based on this bank has already deducted the TDS and paid as Tax to government. If you have closed now, obviously it would appear as TDS. TDS is deducted every month and paid to Government. Irrespective of the FD interest value, you need to indicate in your IT return.

      • Akhil K says:

        Thanks Suresh. I appreciate your blog. Keep blogging. Its really helpful for many like me.

      • Akhil K says:

        Suresh, I closed my FD as one of my friend who is a CA has suggested that if there will be a TDS entry against FD in your form 26 (or ITR ), you will come in the eyes of IT Deptt that you have this much amount in saving banks (5-6L) so there will be higher chances of getting IT clarification letter from It department.
        No idea if its true. In same fear I closed my all running FD. Please suggest.

        • Suresh says:

          Akhil, All banks have to shut down if this is true as there would not be any person who invests in FD. I need you to re-validate this statement from your friend again. In what contest he told this?

  109. ram says:


    My sister wants to Invest abt 7.5lks for  her daughters marriage (6 yrs) down.. What are the best options she has to get max returns(double or near double)(thru bonds,FD's with relative less risky not equitiesMF not sure if it;s a good option)??

    Please provide a list which i can suggest her.. She is a home maker(not much of finance knowlege, i need to be front end for her investments)


    • Suresh says:

      Hi Ram, If you are looking for risk free investments, investment in FD or Debt mutual funds or Post office TD would be a good option. Debt mutual funds, you can expect higher returns compared to Bank FD or Post office FD.

  110. Jasmeet Singh says:

    Tell me one thing is TDS also deducted on the intrest which we get from our Savings bank account?

    • Suresh says:

      Hi Jasmeet, Interest on Savings Bank account is exempted from TDS as per section 194A of IT act. BTW how is our blog and what suggestions do you make to improve our blog. Are you able to see what you are searching for ?

      • Jasmeet Singh says:

        Absolutely.. I Love your blog!! Ya i want to suggest a topic which you should discuss!! Students like me who has just finished his gradution, finds it difficult where to invest with your money. So i would like to tell you to please write a topic on Safe investment options available for young graduates and also the basic terminologies related to banking which we should all know for managing our finanaces better!! Sometimes its difficult for us to understand the jargons which are used

  111. Shah says:

    I have income of Rs.200000 p.a. If I have an additional income of Rs.16000 from FD interest in a year,

    bank will deduct 10 percent on Rs.600. Therefore, the net FD interest is Rs.15400. Is this Rs.15400 taxable income?

    • Suresh says:

      Shah, I will answer your question in three parts. 1) Please fill form-15G and tell the bank not to deduct TDS. They won’t any deduct. You would get Rs 16,000 as interest in your account. 2) You indicated that your income is Rs 200,000 and if there are any deductions, your taxable income should be less than Rs 180,000 (after deductions from HRA, PF etc.,). If you add your 16,000 taxable income to this, your total taxable income should not exceed Rs 200,000 and you need not pay any tax. 3) Assuming that what you indicated Rs 200,000 is taxable. Then your FD interest of Rs 16,000 would be added to this and you need to pay 10% of income tax over and above Rs 200,000 (upto Rs 2L IT is exempted). The income tax on Rs 16,000 would be Rs 1,600. Looks you confused with Rs 10,000 interest tax exemption. If your interest croses Rs 10,000, bank would deduct TDS on total interest amount (Rs 16,000 x 10%) and not on Rs 6,000 (16,000-10,000)

  112. nevis says:

    Dear Mr. Suresh

    This is a very nice article, myself and my wife are working in gulf. We are having FD and RD for our children, do the bank will deduct TDS, as the source for this FD and RD are from my NRI account. I am having PAN card for me and for my children.

    Please advice me as i had invested my whole savings. Also please explain, the tax 10% and above is on the interest or on the amount i had deposited?

    I had read in some article that NRI FD are non taxable, if it is so can i convert these FDs to NRI FD.

    Please help me, i am waiting for your replay..


    Thank You Very much.


    • Suresh says:

      Hi, TDS amount of 10% is deducted on your returns and not on investment. There is no such provision that NRI FD is not taxable. You can submit Form-15 to bank and they would not deduct TDS. However the returns need to be shown as income from other sources in your IT return and necessary tax need to be paid by you based on income tax slab. Since you are NRI, your income from such FD’s may not reach taxable income and hence you may not be paying any tax. However this depends upon your total income in India.

  113. Asim says:

    Dear Sursh

    I am NRI. I have a FD in a bank in India which matured this month. Interest I received is above 10000. Bank deducted entire interest as Tax. I was under the impresession 10% of the Interest I will receive will be deducted as tax. I dont understand why whole interest amount was deducted as Tax.

    Appreciate your response.


    • Suresh says:

      Asim, Bank cannot deduct 100% as TDS. There is something wrong. Pls contact bank customer care and check what exactly happened.

  114. Dharmesh says:

    Hi Suresh,

    I am a salaried professional with last year income of around 5 lacs taxable. I am filling up form 15G for this financial year but is different than the last  years.. Am I requried to disclose my last years taxable income in the new form 15G?


    • Suresh says:

      Hi Dharmesh, While you fill up the Form 15G there is a column which indicates what is your taxable income of last year. There are very good chances that these documents are shared with IT department and there can be questions about whether you are including FD returns and paying necessary income tax or not.

  115. hemanta says:

    My wife get 4 lakh per annum by doing pvt.tution.How can she save tax.Further she also get 3 lakh from gift from his brother and wants to do FD in bank.Whether the amount receved from her brother wioll be treated as her income.

    • Suresh says:

      Hi Hemanta, Upto Rs 2 lakhs the IT would be zero. Balance Rs 2 lakhs, you need to plan to invest in tax saving options under section 80c/80d. The amount gifted by brother to sister is not taxed

      • K.T.Manjunath says:

        Dear Suresh

                 I presume you mean interestincome up to Rs2lacs is exempt from Tax.I would like to know whether a house wife is eligible for Tax exemption.There is also another view that in the case of a house wife this has to be included in the income of husband and Tax will have to be paid.Please clarify ,since I have a similar problem.




        • Suresh says:

          Hi Manjunath, What you are talking of Rs 2 Lakh exemption is individual tax exemption limit. If your wife has PAN no, interest upto Rs 2 lakh can be shown as income and you need not pay any tax. 

          • K.T.Manjunath says:

            Dear Suresh

            Thanks a lot.Please excuse me for the trouble.Some people interpret section 64 of IT act in a different way.For eg Business Today comments are as under,

            "If wife has no independant income of her own any interest earned on deposits in the name of wife without adequate consideration has to be included (clubbed) in the income of the husband."

            Please clarify what is the correct iterpretation and how to go about it to my email  — , so that I can in touch with you for my requirement regarding filing if Tax returns and investments.


          • Suresh says:

            Manjunath, What you are saying is correct. The issue would come generally when someone deposits a huge amount in their wife name who is non earning member and trying to prove that she is doing from her savings. The amount of FD in your wife name should be traced from the income declared in the IT Return every year, then you would be able to prove it. 

  116. RameshL says:

    If TDS is being deducted even with a Tax Saving Fixed Deposit, how does one save on taxes ? 

    Assume an investment of only Rs.100,000 and interest rates below 10 % (typically 9 or 9.5 %) In such cases, the interest would be still below Rs.10,000. If the investor were an NRI, wouldn't the bank still deduct TDS ? 


    • Suresh says:

      Hi Ramesh, Saving income tax (e.g. Section 80c upto Rs 1 lakh) is different from TDS on your interest income. e.g. Govt Bonds (like HUDCO) saves the income tax (Section 80C) as well the interest is tax free means, you need not pay any tax on this.

      • RameshL says:

        Thank you.

        Previously I had looked at a link from some other bank which only listed brief details with interest rate. 

        Here is a link that provides more information about tax saving fixed deposit.

        I had incorrectly assumed that the tax savings were on the interest income but the bank states that TDS will be deducted even on this deposit. That was my confusion. 

        So, it looks like the maximum investment amount of Rs.100,000 is exempted from tax in the year in which one invests the money in such a Tax Saving Fixed Deposit. Since 80C is the same section that includes deductions for LIC premiums paid etc, this is not an additional deduction but all that is subject to the limit of Rs.1 Lakh. If one already has a LIC premium of Rs. 1 lakh, then this Tax Saving FD is of no further use. 


  117. Anil Gopalan says:

    Dear Suresh,  I have invested in SBI  in a 5 year fixed deposit, how do i pay  tax  on the interest, at the end of the 5th year or every year.  Will the tax be deducted by the Bank and the balance returned to me.  Rgds. 

    • Suresh says:

      Hi Anil, Banks deduct the TDS every year. However if you submit form 15-H at the beginning of the financial year, banks would not deduct the TDS and you need to add this as income from other sources in your tax computation every year and pay tax accordingly.

  118. Subramanian.V says:

    In the new Form 15H,I have doubt on TWO columns- namely the following for Assessment year 2014-15  for which this form is to be submitted now:
    Col-21:Estimated total income from the sources mentioned below:
    (I think I have fill up here the total amount which I would receive from this branch during FY 2013-14. Of course mine is only Interest Income. Kly clarify.)

    Col-22:Estimated total income of the previous year in income mentioned in Col – 21 to be included

    (This is not clear to me. For Assessment year 2014-15 for which Form 15H is to be submitted now, "previous year" is normally taken as year ending 31.3.2014. In that case the amounts in columns 22 & 23 are the same.)

    Since I am outside India on personal tour, Your IMMEDIATE response will help me to submit Form 15H in time.

    Indian Resident, Male, Age 74

    • Suresh says:

      Hi Mr.Subramanian, First point is right. Second point when it says “Previous year” it refers the FY2012-13 i.e. the financial year which just completed.

  119. Hiren says:

    Dear Suresh

    I am a NRI and I plan to deposit 1 crore rs in fixed deposit @ 9% interest rate. I am failing to understand completely the tax charged on fixed deposists. Can you please tell me, what would be the net interest rate I would get from bank after paying TDS on fixed deposits?

    Thanking you in advance.

    Best regards


    • Suresh says:

      Hiren, 1) Banks would deduct TDS if the interest income is exceeding Rs 10,000 in a financial year. 2) Irrespective whether bank is deducting or not, such interest needs to be added in the individual’s income and necessary tax should be paid. So, net net, it depends upon in which tax bracket you are falling. If you are NRI and income generated in India is falling under say 20% tax bracket, you need to pay 20% tax on the interest on Bank FD also. If you are getting 9% interest, then 20% of this i.e. 1.8% interest needs to be paid by you towards income tax. Pls let me know whether your doubt is clarified. Enjoy your day.

  120. Prasanna VM says:


    wat will happen if someone having more total income than the taxable amount and if he submits the form 15g for Non-TDS dedcution??

    • Suresh says:

      Prasanna, Banks would not verify your income statements. You are submitting the form 15-G saying you would take care of the income tax formalities. Hence  bank would not deduct TDS. However income tax needs to be paid by you based on your tax brackets and the responsibility lies with you.

  121. Soni says:

    Dear Suresh,

    Knowledgable article. I would like to know the following: I am paying Income tax and my wife is a housewife and having PAN card. Is she eligible to submit Form 15G and eligible for no tax deduction from Bank on FD?? If yes, what is the limit of Interest for whcih bank will not deduct TDS on submission of Form 15G??



    • Suresh says:

      Vivek, the rule applies for you applies for your spouse too. Bank would not deduct TDS if the interest income in a financial year (all FD’s, all branches) is Rs 10,000.

  122. Ravikumar N says:

    Dear Suresh,

    Good article, but expecting more info on this article. Based on your article, what my understanding to reduce the tax is, investing the FD in the name of a spouse, who's earning lesser income. Is this the only option to reduce the tax in case of FD investments?


    Ravi N

  123. Arunkumar says: