Income tax on fixed deposit interest in India

The interest income generated from fixed deposits in India is fully taxable if you are in the tax bracket. The bank is bound to deduct TDS on the interest amount paid after maturity of Fixed deposits if the interest amount exceeds Rs 10000.

If you do not fall under the  Tax bracket then you can instruct your bank to not to deduct TDS on Interest income by submitting form 15G. For senior citizens the from to be submitted is 15H.  This form needs to be submitted to the bank every year.

A sample of both the type of forms can be downloaded from the links provided in the below table. More information on form 15G / 15H

Specimen Of Form 15h & 15g Free Download
Form 15 G download in excel FormatForm 15 G in XLS Format
Form 15 H download in excel FormatForm 15 H in XLS Format
Be aware that interest income earned from tax saver fixed deposits is also taxable.

So income generated as interest from all kinds of fixed deposits is fully taxable as per applicable tax brackets.  You can only instruct your bank not to deduct TDS on interest income, but it will form part of your total taxable income ( it will be added in the head ‘other income’)

11 comments to Income tax on fixed deposit interest in India

  • sajid

    Sir,
    My salary taxable income is 4.5lakh. I have Fixed Deposit interest 17,000 and TDS deducted is 1700 as per form 26a. Can I apply for refund of 1700 in IT returns. Pls help in filing IT returns.

    Thanks

  • Sir, though 15H form was submitted to my Banker against my FD,The Banker deducted Rs.3077 in the year 2011-2012 and did not send to me any information. I knew it only when the FD matured in the year 2013-2014. Immediately,I took the TDS certificate. As I fail to demand the amount on the Return of the same Financial year, I did not recover th amount from IT. Please guide me in such case what I can do in future.
    Pranab

  • dasguptapranab

    Sir, I submitted 15H form on18/04/14 to my Banker for not deducting TDS against my FD interest for year 2014-2015. My total FD interest(provision) for the year will be Rs.265000.
    But I observed they deducted at source on Q1 Rs.6506. It is 15 days passed with three reminders after my objection.Though acknowledged, they are not clarifying – why? please send your advice.
    In such case, What can I do? My branch is saying 15H is in order.
    Pranab

    • Financial Advisor

      As your interest income is above 2.5L there is no relevance in submitting form 15H. You are already in tax bracket. Bank will deduct TDS on FD

  • I am not resident in India.
    I have Bank fixed deposit in India which bring interest say Rs150,000.
    I have rental income from Office premises given on rent.

    Can I give Form 15 G to bank requesting not to deduct tax on interest since my total incomne will be below taxable limit since investment u/s 80 C?

    Please reply

  • Narayana

    Hi,

    I have income on FD is arround 2 lakhs per annum also I haget rental income arround 80,000 (my tenant taken PAN number from us) . total income exceeded 2 lakhs. But I ihave submitted form15G so No TDS deducted. Is there problem submitting form 15G. I also invested 100000 in PPF.. Please advise on impact

  • Neha Chaudhary

    Is post office term deposit taxable?

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