Fixed deposit interest is ordinary income even when no TDS is deducted. Banks deduct TDS when interest crosses thresholds or when you did not submit a valid declaration. Understanding this protects you from surprise AIS lines and from invalid 15G submissions that create penalties.
- Offer all FD interest in the return whether or not TDS was deducted.
- TDS is a prepayment; final tax depends on slab and surcharge.
- 15G/15H are only for eligible persons whose estimated total tax is nil, never a tool to hide income.
- Reconcile AIS interest with 26AS TDS lines bank by bank.
If your total FD interest is below the bank’s TDS trigger or you filed a valid 15G, the bank may not deduct TDS. You must still aggregate interest across branches and banks and show it under income from other sources.
AIS often reveals interest you forgot from small savings accounts, treat it as a prompt, not an accusation.
TDS on interest is typically at 10% (or as notified) without surcharge, while you might owe 20% or 30% on your highest slab. Conversely, if you are in rebate territory, TDS might be refunded via ITR.
Your job is to compute total tax on all heads, subtract TDS and advance tax, and pay balance or claim refund.
These forms declare that your estimated total income is below taxable limits or that tax on estimated total income is nil after rebate, as applicable, subject to conditions for the year and depositor age.
False declarations attract interest and penalties. When in doubt, allow TDS and claim accurate refund with proper return filing.
SalTax writes for salaried taxpayers and professionals in India who want clear explanations, not jargon. Our guides reflect how tax compliance works in practice, including payroll, Form 16, AIS, and filing, but they are educational only. They are not tax, legal, or investment advice. Rules, limits, and forms change with each Finance Act and assessment year. Always confirm the current year on the official Income Tax Department website (incometax.gov.in) and use a Chartered Accountant or qualified tax adviser for your own return, notices, or planning.