How to Avoid TDS on Interest on Fixed Deposits (Bank FD)



Bank Fixed deposit is an all-time favourite investment in India as it provides a decent fixed return for the fixed period and relatively safer as compared to other forms of investment products.  

Specially, in current interest rate scenario, the fixed deposit rates are quite lucrative (8.5 – 10%).  However, it is likely that rates will go down further, so it is advisable to lock-in your interest rates if you want to invest in FD for longer term.

Banks are required to deduct Tax (TDS) @ 10 % if the interest earned on FD exceeds Rs 10,000 in a financial year. This could have a significant impact on the amount received at maturity.

I am sure that everyone wants to save tax and to avoid any deduction from their hard earned money. Most common queries, I received from friends are:

  1. My Bank is deducting TDS on FD, can’t I avoid it?
  2. Do I really need to pay tax on Bank FD Interest?
  3. My total income in under taxable limit, how should I get the refund back?

 Let me try to explain answer to above queries in addition to few ways to avoid TDS on Interest on fixed deposits.


1. Interest earned on Bank FD is Taxable

First of all, you should know that any interest earned on bank FD is taxable & should be included in your taxable income.

Even if the TDS has not been deducted by bank, you need to include the income from fixed deposits in your tax returns and pay the tax as per your tax slab.

If the TDS has been deducted by bank @ 10 %, you still need to include the income from fixed deposits in your tax returns and claim the TDS amount in appropriate column. For e.g if you are already in 30% tax slab, any interest earned on FD will also be attract 30% tax (even if tax is deducted by banks @10%).


2. Tax Deducted by Banks (TDS)

Banks are required to deduct TDS at 10%, if the total interest earned on your fixed deposits in a bank branch exceeds Rs 10,000 in a financial year.

Make sure than your PAN is updated with the Bank otherwise TDS will be deducted @ 20%.

TDS is also applicable on the interest accrued. At the end of fiscal year (31-Mar), tax is deducted on the interest accrued on the fixed deposit(s), even if this interest has not been paid / credited. Check your 26AS to ensure that tax is deducted and paid by bank before you file your return.   

Read my post- How to check Form 26AS


3. So, is there any way to avoid TDS?  

Yes.  An investor can save TDS by following ways: 

a. By submitting Form 15G/15H

If the investor’s estimated total income is below exemption limit, he can submit Form 15G, then the bank would not deduct any TDS from the interest earned. For senior citizens, the requisite form is 15H to avoid TDS.

You need to fill this form at the beginning of each financial year providing details of fixed deposits and submit to your bank.

Read my post  –  Who can submit Form 15G / Form 15H to avoid TDS on Bank FD Interest.


b. By splitting FD across Banks & branches

Another easy way adopted by many investors to avoid TDS, is to split their FD across banks so that the interest earned does not exceed the Rs 10,000 limits.

You can also spread FD across various branches so that the interest earned in a particular branch is below Rs 10,000 in a financial year.

Update Budget 2015 –  As per new tax rules, TDS will be deducted in respect of FD with ALL the branches taken together in case the bank  has core banking solution. Read More at my post here.

However, please note that this will just avoid TDS. You will still need to include this while filing your income tax returns for the year. So, if your income is taxable, then you will need to pay taxes according to your income tax slab.

Suppose you want to invest Rs 1.5 lacs in FD giving 10% interest. If you open FD in one bank / branch, the interest earned per annum will be Rs 15000 and TDS will be deducted. However, you split your investment across 2 banks – Rs 75000 each, then the interest earned on each FD will be Rs 7500 only which will be below TDS limit and no TDS will be deducted by Banks.


See in the screenshot above, just by booking FD in different branches, the TDS is not deducted even total interest in more than 10000 (but less than 10000 per branch). Update Budget 2015 –  As per new tax rules, TDS will be deducted in respect of FD with ALL the branches taken together in case the bank  has core banking solution. Read More at my post here.

c. by Timing the FD

You can also avoid TDS by timing your FD so that the interest earned in one financial year does not exceed Rs 10000.

Suppose you want to invest Rs 1.5 lacs in FD giving 10% interest. If you start this FD for 1 year on 01-April-2013, then the interest earned in one financial year (April 13 – March 14) will be Rs 15000 and TDS will be deducted.

However, if you open this FD in Oct 13, then the interest will be split in 2 financial years (Oct13-Mar14 & Apr14-Sep15) and no TDS will be deducted.


4. How to get TDS refund.

If your bank has deducted tax on the interest earned and your tax liability is NIL , then you can claim refund by filing your income tax return. Check your form 26AS to ensure that tax is deducted and paid by bank before you file your return.

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    • Is it mandatory for nri to submit income tax returns?
      Otherwise we cannot claim tds given on nre FD.
      Banks shd not cut tds on interest of nri fD

    • hi i want to ask a basic ques.i have opened fd’s of Rs10lakh in my wife’s name.she doesnt have any source of income.she has filled form she in taxable limit or does she reqquire to file itr.

      • Hi Praveen,

        On FD of Rs 10 lakh, she will earn less than Rs 1 lakh as Interest. And if your Form 15G is approved, no TDS will be deducted by bank.
        In that case, your wife is not required to file ITR as the Income is below tax slab.
        But, as the large amount is invested in FD, the IT dept will potentially send you the Compliance notice, if she does not file return to check the source of Income.

        Also, as you have transferred money to your wife, the interest should be clubbed against your Income and you need to pay tax.

        • Hi vivek… husband transferred money to wife and interest earned on that money is whose income? U told it would b clubbed with husband’s income? Is it? I think it is wife’s income.. Plz hav a relook on this aspect and reply

          • If you transfer money to wife without any consideration then any income earned on that amount will be clubbed in husband’s income.

  1. I have doubts about your point 3(b). I might be wrong but I don’t think splitting FD accounts in different branches of the same bank will save you from TDS deduction. Splitting FDs in different banks does. Can you please check and confirm ? Thanks a lot.

    • Hi Rohit,

      If you see the screenshot in Point 3(b), the total interest is more than Rs 10000, but no TDS is deducted as it is split across different branches.

      • About splitting FDs across branches of same bank, it is found that some banks follow the practice of Rs. 10,000/- interest per branch criteria while others club interest earned across all branches to to arrive at the figure of Rs. 10,000/-.

        So far as I know, it has to be per branch of a bank.

        Which one of the above is correct practice.


        • Ideally it is per branch. But now some banks are clubbing together on customer basis across all branches as it is easy to consolidate date.

        • bandhu
          now all banks have core banking and by means of pan card and customer id the can detect each and evry deposit so no means to split fd.
          eithe u hav to deposit in defirrnt bank with no pan card upto 100000
          or pay tds.

  2. Hi,

    Thanks for this article, found it very useful. I have one doubt regarding point 3(c). I started a FD on 3rd March 2014 for 1 year, which will mature on 3rd March 2015. Now I want to start another FD in May 2014 for 1 year. So will the previous FD be taxable in 2014-15 and May 2014 FD will be taxable in 2015-16. or both will be taxable in 2014-15. Please clarify. Thanks in advance.

    • Hi Hemant, Ideally the FD interest is taxed on accrual basis. So, on 31 March every year, bank will calculate Interest on all open FD and should deduct TDS.

      FY 2013-2014 : First FD interest accrued till March 2014
      FY 2014-2015 : First FD interest accrued during April 2014 – 3 Mar 2015 PLUS 2nd FD interet from May 2014 – Mar 2015
      FY 2015-2016 : 2nd FD interest from April 2015 to May 2015

      Check your Form 26AS every April to make sure that Interest is credit & if any TDS is deducted by Bank

  3. Hello,
    I have one query, My gross salary for F.Y.2014-15 was: 247396. I had shown investment of 72657 under section 80C. i Also have a fixed deposit. Interest earned on F.D. for this year was 11237. So TDS deducted for 1124. How can I get the refund. Do I need to file Return?

  4. Hi,
    My total gross salary to say F.Y 2013-2014 is 1,50,000. Interest earned on FD was 12567 and TDS deducted was Rs 1256.7. Now how I get the refund. Whr and when do I file the return?

  5. Hi Vivek,

    i have an NRE rupee account account. as of now my status is Resident Indian (temporarily), i am having query – for this financial year my status would be RI

    in this case do my invested NRE Fixed deposit’s interest become taxable ?

    if above is true then person outside india (NRE) doesn’t attract tax on FD’s interest and attract tax when he/she is in india and RI.

    kindly let know if any solution to avoid tax. please note FD’s are invested as NRE FD’s.

    • Hi Chint,
      Are you travelling out of India for Short term assignemnts or are you employed outside India??
      How are you calculating your Residential status in a financial year ?

      • Thanks Vivek,

        I normally travel for long term (1+ years). i am calculating NRI / RI status based on below

        1) 180 days outside India or not
        2) when returning India during end of financial year one shall not be staying more than 60 days in remaining days of financial year

        Regardless of above i may be staying more than 180 days in India during 2014-2015 financial year. hence RI for 14-15

        i have recently invested NRE FD (for 2 years in April 2014), considering above i would be RI for this year. and would need to travel in April 2015 (for 1 year) hence NRI for next financial year (15-16).

        Please can you advise, what shall i do to keep my FD as NRE only considering above fluctuation in resident status ?

        • Hi Chint, As your residential status is changing every year, it is little bit complex to advise.
          Ideally, you need to notify bank, when you are resident, so that they can mark the FD as Resident.

          However, even if you donot notify them, they will continue it as NRE FD and tax free.

          • Thanks Vivek. i am fine till bank keeps it as NRE FD. Was concerned if bank changes my account status to RI, that may implicitly convert my FD’s as RI FD as against NRE FD.

  6. Hi I have a doubt here.
    If I keep FD of 1.5 Lakhs interest earned is say 15k for 1 year. But if i keep for only 1 month it wil be 1.7K will that be considered for TDS?

    • Hi Kiran,

      Only Interest earned will be considered for TDS. SO if you keep FD for 1 month & earn Rs 1700, no TDS will be deducted by bank. Bank will only deduct TDS if the Interest earned is more than Rs 10000.

    • Then bank will not deduct Tax on your interest earned as here your investment period is 1 month and interest earned on that Rs 1.7k.

  7. Hi, as you have said that banks check the open F.D’s to calculate the TDS on interest on F.D’s. Now my question is if I make 3 – 4 F.D’s in one financial year and all the 4 F.D’s are maturing before 31st march. Also the interest calculated on all F.D’s does not cross 10000. Then do I need to submit the 15G form or anything else to the bank?

    • If the total interest for that year is not mroe than Rs 10000, then YOU DONOT need to submit Form 15G. No TDS will be deducted by bank.

  8. I have done a FD of Rs.4,00,000 on 31.05.14 at SBI for 35 month on 9% . I did it in my wife name & PAN .

    She is not engaged in any other income. Do the bank will still deduct 10% or she has to submit 15 G.

    Please suggest.

    • Hi Somon,

      Yes, the bank will deduct TDS as the Interest per year is more than Rs 10000.

      1) As she have no other income, she should submit Form 15G to the bank to avoid TDS.

      2) Even if TDS is deducted, she can file IT returns & claim refund.

    • my wife has agrl. income about Rs.15000 per annum. She has no other income. She has deposited Rs. 1,40,000 in a bank. Interest exceeded Rs.10,000. TDS deducted by bank. Today i.e 09-08-2014 only known that bank has deducted TDS. What is process to get refund. Pls. suggest …


  9. hello,
    i booked 3 FD for one year 10 days
    1. 50000/- on 4th April 2014
    2. 50000/- on 7th April 2014
    3. 50000/- on 22nd May 2014
    Now i am going to submit 15G foam, but i am confused, should i have to submit this Foam again in next year before FD time completed or i have to submit this only for 2014-15 financial year.

    • You need to submit Form 15G only for FY 2014 – 2015. As next year, your interest will be less than Rs 10000, no TDS is due so no Form 15G is needed.

  10. Dear Sir,

    I want to invest 10000 in Tax Saving FD for one year ,will Bank deduct TDS on interest.

    Thanks ,

    • If you invest Rs 10000 in FD, your interest will not exceed Rs 1000, so no TDS is applicable.

      TDS will only be deducted when Interest is more than Rs 10000 (not the investment)

  11. Dear Sir/Madam,

    My total taxable income is 7,40,000 which is under 20% tax slab.

    Now I got 10 lakhs rupees from equity shares (from long term investment) and I would like invest the same in fixed deposit.

    What are best investment options so that I can save maximum tax.

    Thanks in advance for your answer

  12. I have FD of nearly 90000 in a bank account which fetches me approx Rs 8,000 p.a of interest and hence no TDS is presently deducted. Now if i invest 10,000 per month in an RD, the total interest payment (FD+RD) in the financial year will be exceed Rs 10,000 p.a. In this case, will TDS be deducted from FD?

  13. Hi, my mother is a housewife and she has no earning other than interests which she will earn from FD. Now we are planning to deposit 20lakhs Rs in FD A/c. Will it deduct TDS and is it required to file return in her case.

      • Hi Vivek thanks for replying. She is 50 years old .I assume that if I’m opening FD A/C in bank with 9% interest compounded annually it will amount to 1.8lakhs(approx) so that is below the limit of 2 lakhs.However recently she has earned interest of approx 80k form Savings Bank A/C. Will that be accountable.

        Will she be still be in a condition to submit 15G.My main aim is to avoid TDS.

        • Hi Ruchi, You have to see the total interest in 1 financial year. If for FY 2014-2015, the interest is less than Rs 2 lakh, then you can submit Form 15G

  14. In case an employer (school) does not have a TAN number , then an employee(teacher) while filling Schedule 1 of ITR-1 what does fill under column TAN No ?

      • Thank you . Firstly ,Employer (school) is not deducting TDS. Secondly ,yearly salary of employee is about Rs 1,00,000/- which is not taxable . Yet the employee wishes to file ITR-1 . How does the employee do so ?

  15. Hi ,

    If deposit 25000 in form of FD @ 9.75 ROI each month starting from Aug’14 for the next 1 year on my mothers name ,will i get the advantage of TDS exemption on intrest amount

    Please answer clearly with the example as i am new to this.

    • Hi Mohan, If you deposit Rs 25000 as FD with 9.75% interest, you will get approx Rs 1800 in FY 2014-2015
      So Bank will not deduct TDS.

      However, all FD interest is taxable and should be included in “Income from other Sources”

      Whether your mother has any other income ? There will be no tax upto Income of Rs 2 lakh….

  16. Hi Vivek,
    If the interest earned from FDs is less tha Rs 10,000 , then banks do not deduct TDS, but whether this income is subjected to tax?

  17. Iam getting Rs 8000 interest on FDs and Iam in 20% tax slab but adding this interest, income goes to 30% slab. Whether the tax is to be calculated at 20% or 30%.

    • Hi Shilpa, You need to add this under “Income from other sources” and then calculate tax on total income.

      You donot need to calculate tax separately on FD Interest.

  18. […] 6)      Include Income from Bank FD Interest / Sweep in FD Interest – Many taxpayers make mistake of not including FD interest in their Returns as they think that TDS is already deducted so there is no need.  But this is not correct. You need to show the FD interest under Income from Other Sources and then claim the TDS amount under Schedule of TDS deducted. Read more on FD Interest […]

  19. I have taken Tax saver FD 5 years back. Invested 50,000. On Maturity i got an interest of 26000. There was no deduction from bank. My Query is, will the interest taxable? Kindly clarify.

  20. Good Knowledge.. Income tax in India is now become a tough task to understand.. It is surprising that the tax payers are not having much knowledge about the deductions mode..

  21. I have a query! Let us suppose that i have booked a FD in any bank for short term:
    Amount = 180000
    Interest = 10%
    Term = 6 -Month
    From April – Sept
    Interest =9000 (Non – Taxable)
    And On maturity if i withdraw it. (FD Account closed)

    And if the same amount FD in same bank, if i booked for Next 6 month then the again i will get the 9000/ interest.
    So, Bank will deduct TDS on it or not?

    Total Interest = 18000/
    But first FD was closed.

    • Bank will deduct TDS irrespective of number of FD. As long as total FD interest 9across all FD in same branch) is more than Rs 10000, Bank will deduct TDS.

  22. I am in 20%slab . bank has cut 10 TDS on around 32000 rs (interest on FD)
    1) which form I should use ITR-1 or II
    2) which challan I should file?
    thanks, I find yr website very informative.

  23. idbi bank has already deducted the TDS for fixed deposit and less amount has been credited for Monthly interest scheme.This month’s interest is the first time as last month I made the fd whose monthly interest is arround Rs.4000 per month.I haven’t fill up the form 15G yet.If i submit the form now,will they refund the TDS to my savings account.

    • Hi Debashis, They will not refund you the TDS.
      However, if you submit Form 15G now, they will not deduct TDS on future interest payment.
      You can always file your Income Tax return and claim the refund if excess tax is deducted.

  24. I’ve withdrawn PF this year(within three years). Whether this amount is taxable and which ITR Form is to be followed if it is taxable!!

  25. Hello Vivek,
    In the last FY 2013-2014, approximately Rs 81,000 was deducted as TDS from my commissions payable by different companies for bringing export orders for them. One company deducted (January 2014) Rs 6,900 as TDS for the same reason but not reflecting in 26AS as of today. This company say they paid (deducted TDS) to Income tax buy yet to be posted online and this takes time. Since my income tax filing is due in this month, my question is whether can I add this Rs 6900 to my already uploaded Rs 81,000 in calculating refund from income tax. Mine is a proprietorship export consultancy. I don’t have to pay tax again as my TDS is more than the tax that I ought to pay after calculations. I don’t want to loose this Rs 6,900. If my question is not clear please reply so that I can clarify before your answer.

    Many thanks for your time.

    • If they have paid in Jan 2014, that should have been reflected around April next quarter) .
      It seems that either they have not paid the TDS to govt or not filed their TDS returns.

      If you claim TDS which is not reflected in 26AS, there are chances that you will get demand notice for that amount. As that TDS is not showing in IT dept website.

      So you need to contact your client to get TDS certificate before you claim that amount.

      • Sir
        Thank you for the reply.
        They told me about 2 weeks ago that they paid TDS late and paid interest also. I believe they paid TDS late to Govt.

        1. Can I wait for a few more weeks for this credit to appear in my 26AS. (As I said earlier, my TDS is more than the tax I need to pay and as such need not pay further tax before the deadline.)


        2. Can I go ahead with tax filing including this amount believing them. By the time Govt. process my refund after a few months, this 6,900 would be showing in my 26AS.

        3. Can you tell me if the refund is done by software automatically based on PAN # or an officer will go through each application and process refund manually.

        4. Can I take advantage of this TDS next FY 2014-2015.

        • 1) It is better to file return before due date.
          2) You can claim this 6900 and claim refudn
          3) Most refunds is done automatically by software. But high amount may be scruitnised
          4) Youc an carry forward the TDS next year. There is a column in the Form. But that will be applicable when you can see that TDS is deducted in advance. So not applicable in your case.

  26. Hi Vivek,

    Need a clarification regarding Form 26AS. Total amount paid / credited shows an amount Rs.33,066 on which 3306.60 has been deducted and shown under tax deducted for FD interest. My understanding is that there is an exemption of Rs. 10,000/- on interest income from FD. If its true, how much should I consider for calculating the tax. Will it be Rs. 33,066 or Rs. 26,033 (33,066 minus 10,000 exemption). My income falls in 30% bracket. Please clarify.


    • Hi Vishal, There is no exemption for FD Interest.
      u/s 80TTA, exemption for Rs 10000 is for SAVING BANK Interest only.

      You need to show Rs 33066 as Income from other sources and claim TDS of Rs 23306 in TDS section.

      You may need to pay additional tax based on Tax calculation

      • Thanks Vivek. This time I paid a lot of tax, however in future would like to avoid or minimize the tax liability at least on Fixed Deposit. Need your advice now

        If I transfer some funds into my wife’s account and then she opens up a FD in her name, does that saves tax. She is a housewife but have a PAN, so we can submit Form 15G /H and since her income will not fall in taxable bracket, I believe that will save tax, however not sure if it is within tax laws.

        Please suggest.


        • Hi Vishal,

          If you just transfer money to your wife without consideration, then any income earned on that will be clubbed in your income. So you need to include that in your income & pay tax accordingly.

          Alternative, she can borrow money from you against any jewellery etc.. then she can use that money & any interest earned will be taxable in her hands.

          • hi
            i did the same ie, transfer money from my account to my wife account and opened fd from her account. now how can i avoid her earnings clubbed to my income ?

            do i need to prepare any document like she borrowed money from me against any jewellery or something like that? and where i have to update that details ?

            awaiting for your answer

          • Hi Sam, Yes if you can create that document and keep with you in case of any scrutiny. You are not required to submit to anyone now.

  27. Hello Vivek,
    I have 5,00,001 fixed deposit in post office which is opened on april 2008 it got matured on april 2014. How much money i will receive when i take my money after maturity?as they said 5% bonus when matured. will i get interest from may 2014 to till now.
    Thanks in Advance.

    • Hi Ratna, PO Fixed deposit is normally for 5 years. But you said it was for 6 years ?

      Can you please check which Investment it is and what is the duration. It should also show the Interest rate.

  28. Hi,

    Have some clarification regarding FD deposit.

    My mother doesn’t earn. For her expenses and other, am gifting here a sum of 3 lack and she is depositing that amount in FD. So does the interest received is taxable ? Or how it works ?

    • Hi Usha,

      Investment will depend on your time horizon, goals, risk taking ability, your age, tax status etc.

      So please let me know,

      1) Have you considered capitalgain tax at time of sellin ghouse
      2) Other details as asked above – age, tax slab, goals, time horizon etc..

  29. Dear Vivek,

    I found your post quite informative. I come in 30% tax bracket but I wish to avoid tax on interest income from fixed deposit. At present, splitting FD’s in different banks wont help as they can be tracked by PAN.
    More over I want to know what % of income I need to keep liquid money in FDs. Im not into property investments or mutual funds so what other sources I can explore to save on tax part.

  30. Hi Sir,

    I have a FD of Rs 5,00,000. Let’s say it is @ 10%.
    At maturity, interest earned = Rs 50,000 and Bank will deduct Rs 5,000 as TDS.
    So, net interest earned = Rs 45,000

    My Income falls in 20% slab
    Now, my queries are –
    1) Income earned from other sources will be = 45,000 or 50,000 ?
    2) Will there be extra 20% deduction on the above amount ?

    Thanks in advance

    • The Interest from other sources will be Rs 50000 and then you can claim TDs deducted under Incoem Tax paid Section – 5000

      You will have to calculate tax on yoru total Incoem. In this case, the Tax may be say 50000*20% = Rs 10000

      As TDs of Rs 5000 is already deducted, you need to pay rest Rs 5000 as Self assessment tax.

  31. Hi Vivek,

    I heard from one of my uncle that their are some FD’s i.e which are government schemes in the banks, if we deposit the money for some x period of time irrespective of the interest earned their wouldn’t be any tax deduction. I heard the period to be around 5 years or some where near it.Is it true? The TDS would only be deducted if we take out the money before the maturity date.

    Thank You.

    • Hi Nanda,

      On all Bank FD , TDS will be deducted if the total interest in 1 year is more than Rs 10000.

      There are Tax Saving FD ( duration 5 years) – where if you invest, you will get tax deduction under 80C. This is similar to investing in PPF, PF, ELSS fund etc. where you get deduction u/s 80C upto Rs 1 lakh.

      But Interest on such FD is taxable.

      • Hi,

        I am trying to do this FD on my nephews name i.e a gift deed. She doesn’t have a bank account.I was advised by my uncle that i open an FD under my name and put her as a nominee.I am an NRI, would that be ok, because i was once told by the bank official that the TDS would be deducted if i have more than one FD’s ? They said for the 1st FD i wouldn’t be charged, this is something i am not aware of.

        Thank You.

  32. Sir,

    Require clarification regarding FD.

    Having deposited Rs.3,25,000/- ( maturity one year ) every month from Jan – Dec @ 9.00 interest per annum,in the same bank submitted form 15G, so as to receive interest every month on maturity. For the past two years TDS was not deducted, received the interest without deductions. On 06th August 2014 amount of Rs.18,450/- was deducted from the interest, even the Bank Manager could not give convincing explanations

    My question is :

    a. Bank Manager should have know the IT Act 26AS (Tax is deducted & paid by Bank before you file your return)
    b. IT or the Bank should have inform TDS deductions On FD
    b. Can file IT returns & claim refund ( which in an article came to know), never filed IT return before.
    c. I am unemployed, the amount accumulated by Principle Amount & compounded interest over an period of 18 Years,
    so to have regular interst on monthly basis as source
    d. Is there any clause to claim TDS deduction or minimize the TDS



    • Hi Mahesh,
      Pls clarify

      1) How much have you invested? whether it is total of 325000 ?
      2) When this FD was made
      3) you said – so as to receive interest every month on maturity ? Whether interestis paiud every month or on maturity ??
      4) in which bank the FD was made? whether it is co-operative bank ?

      — In any cae, if you donot have any other income and no tax is payable, you can always file return & claim TDS refund. Show the Income from FD under Income from othr sources & claim the TDS as Tax deducted & paid.

      You can file return in ITR 1. See how you can file IT return on IT dept website for FREE

  33. Hi Vivek,

    I made FD of Rs350,000/- in Aug-13 (for 1 year).
    Bank has charged TDS of Rs.2000/- (approx) on 31-MAr-14.
    Shalll I need to show the total accured instrest as on 31-Mar-14 (corresponding to this FD), as a part of my income – when Iam filing the income tax returns for FY 2013-14 OR I can show it as my income in next FY.
    I am falling in 30% income tax slab.

    • hi Anil, if the bank has deducted TDS, then it is better to show that portion of Interest as Incoem in FY 2013-2014 returns & claim that TDS.

  34. Hi Vivek,
    I initially filed made a mistake in filing my returns and hence re-filed it again. In this case I have to send only the revised ITR-V to Income Tax Department or both (ITR-V of incorrect returns + revised ITR-V).

  35. sir,
    my mom is retired teacher(60 yr). her pension per yr around 100000 . if she done fd 10,00,000 in different branches(90,000 each 11 branches of diff banks) is it tax return will be file. is it tds deduct. deposit will be from august 2014 for 2 yr
    with regards

  36. sir,
    my mom is retire teacher (60 yr) .her pension 1,00,000 yearly.
    If she done 10,00,000 as fd in different branches of banks( 11 fd each of rs 90,000)
    1) is it any tds deduct,
    2) is it she file tax

    deposits from aug 2014 onwards for 2 to 3 years.

  37. hello..thanx for ur wonderful advice..i am student at present..i dont have any income.although i am getting scholarship..i want to invest near 1 lac rupees. which i have saved till now..what are the scopes and outcome to do so in order to avoid TDS or any sorts of deduction from interest.??plzzz….reply

    • If you have no income above Rs 2 lakh, you can submit Form 15G to the bank and bank will not deduct any TDS on Interest. If you want to invest for a long term, you can consider doing monthly SIP of Rs 1000 in Equity mutual funds.

  38. Dear Vivek,

    I had posted this query last time also but the system i guess didnot take it. I want to know to save taxes on the FD can i take FD in the name of my mother as a joint person or as a nominee so that i dont have to pay taxes on it. plz reply.

    • Hi Venkat,
      You can gift money to your mother and she can make FD in her name. You can become 2nd holder or nominee.
      As long as she is First holder, the income will be taxable in her hands.

  39. Dear Vivek thank you so much for your very useful article. Before reading this article I was bit confused about this particular section. Even my bank’s manager was unable to help me understand me, he was all just confusing me. But hats off to you sir. So please help in my situation so that I will be able to clear the last doubt. I am going to buy a FD in Andhra Bank for 90K for 1 year.The interest rate is 9%. So my interest earned will be 8100. So that means I am eligible for exemption in tax deduction right? Just help me in this question. Thanks to you Vivek again. Take care.

  40. Hi Mr.vivek
    I am working overseas and i have converted around 20 lakh from overseas into my india saving account i want to make a fd @9 % with a bank can i use form 15h and pay no tax.i have NO other income in india .will the tax exemption be applicable to me .please help on this matter

    • Hi Deepak, If you make FD for Rs 185000, then FD interest earned till March 2015, will be less than Rs 10000 and NO Tds will be deducted.

  41. Hello Sir,
    my mother aged 68 wants to open FD for rs 2700000.00 Got money by selling her fathers property . she has’nt have pan card and does’nt have any other source of income. i want to know that is there any way for any tax exemption.
    with regards

    • Hi Wilson, As making an FD of Rs 27 lakh, will generate an income of Rs 2.5 lakh a year.
      You should apply for PAN card at least.

      After that you can submit form 15g/h to the bank so that no TDS is deducted. You can also file returns & claim refund of ant tax deducted.

  42. Hi Vivek,

    Thank you very much for the info on the Income taxes. As suggested by you i had checked the Form 26AS and found that 10% deduction has been made by my bank on FD which is a joint between me and my father. Father is a retired pensioner. I fall in 30% taxes bracket. I ahve not shown them in my income tax. Now there are two things:

    1. how do i correct my income tax what i have declared for this year.
    2. What is the meaning and ramification of holding joint account or either or survivor or nominee or the first name etc on the income tax?

    • Hi Venkat, TDS would have been deducted against PAN of first holder. Can u pls check against which PAN, TDS is deducted.

      1) You can always file revised return
      2) It is better to make your Father as First holder, so that Interest earned will be treated as his income.

      • Vivek,

        Thanks for your guidance. I have to file revised return as i had not declared the bank FD interest. But since i filed late in august 1st week is it possibel to file the revised IT?

        • Hi Venkat, If you have not filed return on time, you cannot revise it.

          Additionally, you can also pay additional tax applicable on FD interest under that Assessment year.

  43. Hi Vivek,

    I am in 30% tax slab & want to invest an amount of 3 Lac. But i want to save tax at a non risky investment. For FD there is almost nil invetsment benefit(approx 6% on FD if tax deduction is also considrede)

    1. is income fund a better option than FD? as i could earn more but with higher time frame of investment. Do you have in mind some other less risky options where i can save tax also & earn slightly better than FD

    2. Someone in bank suggetsed that if i invest my FD maturity amount into income fund – i can avoid tax.?? Is that possible or was he fooling us?

    Let me know thnks in advance

  44. hi Vivek,
    thanks for the article. i have a question for you. my total income including the interest income falls in the 20% slab. but my interest income is below 10000 from FDs. can the bank still deduct TDS? will submitting tge 15G help? my brnach manager tells me, if my income from all sources is above the taxable limit, the bank will deduct TDS no matter the amount of FD interest. is this true? thanks in advance.

    • Hi, This is not correct. Bank will only deduct TDS if the Interest eanred is more than Rs 10000 in 1 year.
      So if your FD interest is less than Rs 10000, bank will not deduct TDS.
      Which bank is yours ?

  45. Hey. Good info. Hey i live in usa but my father mother live in india. I want to deposit money in FD on their names and me as beneficiary. The amount is around 90 lakhs. So the interst on 90 lakhs will be around 8 lakhs yearly at 9%. And my parents have no other income. So how much will they be taxed or if any way to avoid tax. Or if they are exempted under senior citizen law. They both 61 and 60 yrs old.

    • Hi Raman,

      1) One option is that You can open an NRE Account in your name & all NRE FD Interest in Tax free in India. But as your are US citizen, you need to include that income in your US Tax returns and pay tax there.

      2) If you want to gift them money & make FD in their name, all interest earned will be taxable in their names.
      You can split FD in name of father & mother . so 45 lakhs each under father & mother , so interest eanred will be approx 4 lakh each.
      For sr citizen, Upto Rs 3 lakh the tax is NIL.
      further, they can get deduction upto Rs 1.5 lakh by investing in 80C investments. So no tax will be required.

  46. Hi,
    I am a pensioner and IT assesse. I have paid full tax in March 2014 for FY 2013-14. In June 2013, I have deposited my pension benefit in a band as FD for 18 months.
    My first question: Can I pay the IT on FD interest at the time of maturity? or I must the include the earned interest in every financial year and pay IT.

    My bank manager asked me to give 15G in May 2014 (without deducting TDS). I gave 15G without knowing that I am not eligible to give 15G as I am already IT assesse. In July, I have seen the entry under 15G column in 26AS form. If I pay tax for the entry in 15G column, I have to pay interest for the late payment.

    I met IT department. They ask me to request the manager to withdraw the 15G form and pay the tax at the time of maturity of FD. But manager asked me to pay the tax now and file the IT return.

    Please guide me to go in the correct way.

    • Hi, You should revise your Income Tax return for FY 2013-2014 (AY 2014-2015) and include the FD Interest as “Income from Other sources”
      Once done, calculate the revised tax and pay the balance tax as self assessment tax.

  47. i m planning to invest rs.300000 in fd spiliting in two banks (1.5+1.5 lacs) in this time august or september 2014.
    please suggest me right timing and
    will the tds deduct?

    • If you invest Rs 1.5 lakh in FD in Sep 2014, (assuming 9% interest), the interest for FY 2014-2015 will be less than Rs 10000, so no TDS will be deducted in this year.

      However,if you keep the FD for full year next year in FY 2015-2016, then Interest will be more than Rs 10K and TDS will be deducted.

  48. Hi Vivek,

    Actullay after my husband death i recieved 8lakhs from his company. i want to go for FD for my kid future but i my worry about tds deduction. My son is 16years only how i can manage this, please suggest me as i m having saving accounts in three banks and i m a housewife.

    • Hi Inder,

      Yes it is necessary to submit PAN for 15G. In case you fail to provide your PAN number to the bank, the bank will deduct TDS @ 20 percent against the applicable rate of 10 percent even if you have submitted form no. 15G and 15H.

  49. Hello Vivek,

    My mother who is 60 yrs of age has several FDs in SB an BOB.

    Her income earned as interest on FDs does go upto 5 to 10 lakhs in both banks.

    She also has no other income besides the interest that she gets on FDs.

    How could we save her from TDS and get refunds on TDS deducted previously.

    What documents do we need to have before we file IT returns.

    Thank you,

    • Hi, As her income is more than taxable limit, she cannot submit form 15G/H.
      So , if interest earned is over Rs 10000, TDS will be deducted by bank.

      She need to file returns & show Interest as Income from other sources. She can then claim the TDS deducted.
      Any additional tax payable needs to be paid. If there is a refund, it can be claimed.

      You just need to file returns in ITR 1. You need bank statements to check the amount of Interest eanred in that year.

      You can also check , how much TDS is deducted by checking her Form 26AS. See the link below –

  50. hi Vivek, I have just one question. If I open a RD account for the interest rate 8.75% for 10 years, then my maturity value is 10,15,000. So my total interest gained is 3,79,000 in 10 years, which is around 37,900 yearly I guess. But as per your point if and only my interest gained is below 10k per year then only TDS is not applicable. But in my situation the interest gained per year is 37900. Bank Manager said that there is no TDS for the RD I have mentioned.So I am confused.The bank is Bank of India. Please guide me. Thank you.

    • Hi Mritunjoy, There is NO TDS on Recurring Deposit. TDS is applicable for FD & not RD.

      But just because TDS is not applicable on RD, it doesnot mean that Interest on RD is tax free. You need to show the Interest in your Income cTax return under “Income from other sources” and calculate tax accordingly.

  51. Hello,

    I think we can not avoid to give the tax in FD.I think all the methods are just for delaying the tax on FD.
    See if i am earning 10 lakh per annum and my tax slab is 20%. So in salary suppose i am giving 80000 in tax in a year.

    If i have FD in 5 banks.
    1. Interest earned: 7000
    2. Interest earned: 8000
    3. Interest earned: 7000
    4. Interest earned: 8000
    5. Interest earned: 5000
    TOTAL: 35000.
    Bank will not deduct any single penny from your account.

    But when i will file ITR, i have to show my FD’s and i have to give 20% on 35000. CORRECT ?
    Then what is the point of splitting the FD in all the banks.

    One Question : If i will not show my FD on ITR then what will happen, As my all Bank accounts have my valid PIN number?

    • Hi pawan,

      You are correct, but many people think that if TDS is not deducted, they donot have to pay. Interest on FD needs to be shown under Income from other sources & tax neds to be paid.

      However, many people whose income is below taxable limit, or no tax is payable, they donot want to go through hassle of filing return & claim TDS refund. So they prefer that no TDS is deducted.

      But in your case, if you are already paying income tax, there is no point on splitting FD to avoid TDS.

      In case you donot show the Interest, that may be picked by the Income tax officer and penalty can be levied. it is better to show the Interest & pay correct taxes.

      • Is thr any option ao tht we dnt hv to pay income tax. Like PPF. Or life insurance
        What if i will buy gold and sell it when needed does i hv to pay tax whn i will sell it???
        Or can u suggest any such acheme in which tax can be avoided.

          • Vivek, I know that if i have income i have to pay tax.

            But I am asking about the money which i got after tax deduction, it’s my salary.
            So, My question is, I am in 20% slab. Now i want to invest my earned salary in such a scheme that after gaining interest from that scheme i don’t have to pay the tax.
            As per my knowledge PPF is such a scheme in which, after maturity you don’t have to pay Tax. But the limit of PPF is only 1.5 lakh per year.

            Like wise i want to know more schemes.

          • Hi Pawan, so you are looking for Tax free Investment options. There are not many.

            You can invest in PPF, Tax free bonds, Savings Account (upto Rs 10000 Interest)

            Equity mutual funds (tax free after 1 year of holding),

            Arbitrage funds (tax free after 1 year of holding) –

            You can invest in name of your parents. Gift them money and they can invest in their name in FD.

      • Hi vivek,
        Thanks for clarifying. I have one more question:
        Suppose a person having no income and he has FD’s in Banks. interest earned from FD’s are around 4 lakhs.
        So as it’s more than 2.5 Lakh,so IT should be imposed. But if that person opens his PPF account of 1.5 Lakh then No Tax should be imposed on him. because 2.5 is the exemption + 80C exception is 1.5 Lakh.
        Is my observations are CORRECT.
        If yes then what document should be provided to bank(apart from 15h or 15g) so that No TDS should be deducted,(how bank knows that PPF that the person is having PPF account in post office/or in other bank) And As per law if income is below 5 lakh it is optional to file ITR, so that person don’t want to file ITR.

        Please clarify.

  52. hi sir
    i want to make fd 500000/- from dated 01/10/2014 @ 9.00% for one year.
    interest earn during financial year 2014-15 above 10000 rs.then tds deducted.
    but i submit form no 15h or 15g dated 02/10/2014 bank will be accept or not accept form .kindly tell me

  53. My father will retire after 1 month and how can we fixed deposit to earn good monthly interest from his
    retirement amount,any help if you can do will be appreciated

  54. Hi Vivek,
    Firstly I would like to say that your knowledge is very good. Now I have a query that, my granny has a FD with private investor company which calculate interest as 13% we had invested 1 lac for 4 year which were doubled and now we have invested the renew amount for which the interest will be received around 14 k. So the main query is will it be taxable bcoz my granny has no other income? And if taxable how do we get the refund?

    • Hi Vrutti,

      In case of private company FD, TDS is deducted if the Interest is more than Rs 5000 in a year.
      But, as your granny has income below limit fo Rs 2.50 lakhs, she can submit Form 15G/H to the company, so that no TDS will be deducted.

      Even for last years, you should ask for TDS certificate from the company. If TDS is deducted, then you can file the returns & claim the refund.

      You can also check if the TDS is deposited by the company on behalf of your granny, by checking the Form 26AS (based on your granny’s PAN) . see below:

      • Hi Vivek,
        Thanks for the details. But my granny doesnot have a PAN No as she is less educated and not very much known about this she dont have Proof to make Pan as we dont know her birth date she is apprx more than 60. How will it work ? Can you suggest any way for this? And also as you suggested that I should give the form 15 G/H to company will they accept it as the investment is renewed 1 year back which was earlier for 4 year?

        • Hi Vrutti, You cannot submit 15G/H for previous year. Check with the company whether they have deducted TDS? and what is the amount of TDS?

  55. Hi Vivek,
    I would also like to know if the Fd is passed to me as I am the Nominee, as we dont want to with draw it even after 4 year. Will I be taxable for the amount recieved after my granny and I am not in taxable slab?

    • Hi Vrutti,

      If the FD is name of Granny, any interest earned will be her income.
      If you are nominee, after her he amount will be paid to you by bank.

      If you choose to keep that in FD form, Bank will create a new FD in your name and any Interest earned thereon will be taxable in your hands.

  56. Hi Vivek,
    I would also like to know are there any benefit of Short Term Deposit , if done for 6 months with a Principle amount of 50000. Will it be beneficial I have to make Total Income of 4 lacs in 2 Year is it possible by Fd with a Salary of 10k expenses are not made from salary?
    Pls suggest some risk free investment mode?

    • Hi Vrutti,

      If you deposit the amount Rs. 10000 monthly in a Recurring Deposit, at 8.75% interest rate per annum , then after 2 years your maturity amount will be Rs. Rs 2.62 lakhs.

  57. Hi Vivek,
    Thanks for the Details.But my granny doesnt have the Pan NO and Doesnot have the relevant proof to make the same. So what can be done in that case? Suggest me some risk free investment to make income of 4 lacs in 3 years in Salary of 10k . Please give the solution for the Tds problem?

    • Hi Vrutti, You can submit form 15g/h to the company so that no TDS is deducted, but you need PAN for that as well. So you should apply for PAN for your granny.

      The risk free investment for 3 years will be RD. You can open RD. the interest rate will be approx 8-9%. However, that will not achieve your target of 4 lakhs in 3 years. You need to either revise your target or increase your savings

  58. hi Vivek,

    i am tax payee in the slab of 10% i have 5 bank accounts and they will provide me around Rs 45000 interest 9000 each. 3 of them are on wife name and 2 of mine. since no TDS deduction by the banks as per the law.
    so am i doing wrong because i am not declaring this money anywhere ?

    • Hi Vijay,

      Yes you are doing wrong. Even if TDS is not dedcuted, you need to show that Interest as your Income when filing Income tax return & calculate tax accordingly.

      • thanks vivek.
        my wife is house wife so the interest on her account need not be included in my ITR declaration so may i earn Rs 27000 from wife accounts rs 9000 from each bank .
        is anything wrong in this ?

        • Hi Vijay, if you have given money to your wife and she has invested in FD & earned income. Such income will be clubbed under yours as Income tax has clubbing provisions.

          Alternatively, you can give her money against something (advance against jewellery etc)But in case of Income tax scrutiny, you need to prove the situation.

          • As per my understanding there is no provision to earn more then rs 10000 by our money from banks means operating with multiple banks for the tax payee is not the solution to make out more money as interest.

  59. Hello Vivek,

    do you have any article regarding GIFT , and gift related tax.
    Suppose my father gives me 3 -5 Lakh rupees , CASH payment.
    And i make FD of those rupees,( i have to declare it on ITR and i have to pay tax on interest received on those FD). Will IT dept can question to me that from where you got this much of rupees? in that case what to do?

    One more thing: If i did not make FD, just save that amount in my saving bank account(no declaration to be done in ITR), But IT dept can ask me for such a big amount deposited in my account, in this case also what to be done.
    Plz clarify. Is it treated as a gift and what is the limit of that gifts received from relatives?

    • Hi Pawan,

      There is no limit on amount , your father can give you gift. There is no tax.
      But the problem will be if he gives you in cash as you need to deposit that cash in your bank account. This will be reflected as major transaction under your PAN. IT dept can ask you for details in case of scrutiny. As long as you can show from where the money legitimately came, there should not be an issue.

      Whether you make FD or keep in saving account, the Interest needs to be disclosed in Income from other sources. For saving bank interest, you can claim deduction upto Rs 10000 u/s 80TTA

  60. Dear Vivek,

    As i am employee of a private company, my company is deducting Tax on monthly basis.
    Now if i have FD in which i have earned 8000 in one financial year say 2014-15. (As this is lower than 10K so no TDS will be deducted by bank).

    So, if i will not declare in company payroll then no Tax on 20000 will be deducted.

    But if i want to declare it in ITR then how IT dept. will deduct this tax? Is it from my bank account?
    In this case how the tax on 8000 will be given to IT dept. ?

    Pawan Pant

    • Hi Pawan,

      You need to file Income tax return even if TDs is deducted by your company / bank. Otherwise there are high chances that you will get Compliance notice from Income tax department.

      When you file your return, you need to show income as per Form 16 & other income like Bank Interest, Exempt dividends etc, Share Income etc, then calculate tax on total Income.

      Then claim the TDS amount. If the TDs deducted is les than tax payable, you need to submit the tax to the income tax dept by filling a challan form as Self asseesment tax paid.

      You can then claim this tax paid in the IT form.

  61. Dear sir, I am a NRE for the last 14 years, and planning to return for good after 2 years. Next month I would like to open an FD of 15 lakhs, for two years. Is TDS applicable for the interest?

  62. Dear Mr Jain, I have a SBI saving account. How can I know online if it is NRE/NRI. And what is the difference between NRE and NRI?

    Below I what I see online as description of my account.

    • Hi Syed,

      When did you open your account? before becoming an NRI or after? Looks like a normal Savings Account.
      If you are an NRI, you can open following 3 type of accounts

      You need to open a NRE Account with any bank in India by giving your passport & VISA proof that you are living outside India. Once the NRE Account is opened, you can make FD in NRE Account & all Interest is Tax free.
      In NRE Account, you can only send money from Outside India.

        • Did you opened the account in India when you were physically there? Does it say NRE Account on your Passbook / bank statement or chequebook.
          If not, then most likely it is normal savings Account.

          • Dear Sir, thanks for your reply

            I opened the account durin my visit during 2007, and it does not say NRI on the passbook or bank account.

            Can you please help me understand the bellow:
            1. For the FD of 15 lakh, when will I get the interest.will it be monthly/quarterly/at meturity?
            2. After all the expenses I still will have about 20 K IRS, please advice any scheme where I can invest for better returns.
            Thanks in advance.

          • Hi Syed,

            In case of NRE FD, you can choose to get Interest on quarterly basis or at time of maturity.
            In case of Normal Indian FD, you can choose to get Interest on monthly /quarterly basis or at time of maturity.

            2) Not clear about your 2nd query. Pls explain. For 15 lakh FD, you will get approx. 135000 Interest in a year, which is below taxable limit.

          • Dear Mr. Jain,

            Thanks for your professional advise earlier, and at present I am in contact with HDFC to open an NRE account, which I believe will be done in 15 days.

            Please advice how many NRE FD’s I can have on one NRE account, because I wish to split my fd of INR 15,00,000 in 15 fds of INR 1,00,000 each. The Idea is to be on safe side if at all i need some money, so that i can break 1or2 fd instead of breaking the fd of INR 15,00,000.

            Awaiting your reply.


  63. Hello,

    I get foriegn remittance for software work and through paypal or wire. Sometimes I incur this amount in my mother’s name not going above 2 lakhs

    Is it possible submit form 15G for tax exemption for interest on FD in her name.

    Thank you.

  64. First of all thanks for various articles i found them informative thanks for them ..
    can you plz clarify my folowing doubts :
    About Gift Money :
    * What is the limit of gift amounts received from parent to children ?

    * if father/mother gives money to his/her children in check or in cash and that money is deposited by son/daughter to make FD will that income from interest considered of the son/daughter or of Father/Mother who out of them need to show it in there taxable income parents or son/daughter….?

    *which one of them is considered as income of son/daughter money tranferred/given via check or cash ?

    * if mother who is paying tax gives around 3 lakh rs either lumpsum or in parts to her son/daughter who ar not working and they in turn invest it in FD then will that considered income of son/daughter or Mother who need to show that money , interest as well as recieved money, in his/her taxable income mother or children plz clear my doubt …?

    *and does FD splitting method is legal or not like if i club two methods Timings one and FD splitting
    will that be legal…

    thank you plz reply…

    • Hi Rajiv,
      There is no limit on the gift amount from parents to children.
      If the children are minor, then any direct interest earned on that amount will be treated as income of the parent.
      But if the children are major, then it will be treated as Income of Children.

      If the amount is large (more than Rs 50000) then it is better to transfer by cheque.

      There is nothing wrong in splitting the FD or timing as it will just avoid TDS. That will still be an Income & needs to be shown under Income from other sources.

      • Thanks for clarifying i want to ask you few more thing like ..plz tell me :

        *are you sure gift money transferred from parent to child via check is termed as income of child (major) ??
        as i have read that if parent tranfer money to child(major) and he /she in turn invest them in FDs that income from interest of FD will fall under parents tax income…am i right in this point …?

        *plz clarify income from FD interest made from gift money .. fall under whose income ?

        if it falls under Children income then do still parent need to show that interest income in there taxable income …should parent have to show or child have to show…that in income from other sources…..?

        * and money tranferred via check /online or cash to child (major).. bank acc like more then 3 lakhs in given FY ..will that amount fall under taxable income of the child even if child have no other income…? do he need to pay tax on that gift amount… ….? and fill income tax as per my understanding parent already filled tax for that amont so child need not to fill again tax for that amount .as parent have transferred tax deducted money to child account….am i right….?

        *and if apart from parent i got money like 1 lakh during same financial year from some other source ..then will this 1 lakh plus 3 lakh gift amount make the child eligible for income tax…on rs 4 lakh or child won’t be eligible for tax as income is 1 lakh only …and 3 lakh is gift amount from which tax already deducted…am i getting it right …?

        plz clarify this as i will plan money investment on the basis of these info…

        thanks and regards

        • Hi Rajiv,

          Actual Gift money is a Capital receipt is not treated as Income for anyone. Any Interest earned on that amount is Income.

          If parent transfer money to the major child, and they make the FD, then any FD interest will be income of Child.
          Child has to show the FD interest income in his returns (not parent return).

          So if you gift your child Rs 3 lakh – it is not taxable
          If your child get another 1 lakh, depending on the nature – it may be taxable.
          Any interest earned will be taxable.

  65. I have one Fixed Deposit for Rs. 50000.00 with State Bank of India ubder Tax Savings Scheme, I have got rebate under
    80C of IT rule in the opening year but Bank has deducted TDS for Rs.59.00 & Rs.525.00 in FY-2012-13 & 2013-14 on accrued interest payable less than Rs.10000.00 in both the year. As per Bank’s rule TDS will be deducted on interest payable above Rs.10000.00. So ask through you whether TDS deduction will be justified or there are separate instruction for Tax savings Fixed Deposit . Please clarify

    • Hi Manik, There are no separate TDS rules for Tax Saving FD.
      If the overall Interest from that bank is less than Rs 10000 in a year, they should not deduct TDS. You can visit branch & ask the reason for TDS deduction.

  66. Hi Vivek,

    Can you please clarify on the below
    If I have a FD of 22 Lakhs and getting 9% Interest on the same Rs 1,98,000 and I don’t have any other Income for the year does I need to pay tax and Can I claim back the TDS deducted by bank

    • Hi Vinod, if you do not have any other income & TDS is deducted by bank, you can always file return & claim refund. In case of refund, it is better to file return online & processing of refund is faster.

      You can also submit Form 15G to the bank to avoid any TDS deduction. Read the post below on who can submit form 15G

      However in that case, the IT department may ask about the lumpsum amount of Rs 22 lakh which you have despite any other income ?

      • Hi Vivek,

        I am an NRI and I have some money in in my NRI FD and I will get some End of service benefit from here as I am planning to come back to India. I think I need to change from NRI FD to normal FD once I am back in India. Is there is time limit to change the FD from NRI FD to Normal FD.

        • Hi Vinod, Normally you need to inform your bank within 6 months of change in residential status.
          Please note that once you become resident & convert the NRE FD into normal FD, any interest will be taxable.

  67. Hello sir. infact of producing form 15 g TDs has been cut from my mom FD… Plz tell me the procedure of claiming the TDs amount my self…

    • Hi Anu, If TDS is already deducted, you need to file Income Tax return & then claim refund. it is better to file return online as the refunds are processed much faster.

  68. sir,i have no income .i have made a fd of rs 30Lakh for 1year intrest 9.50 per in bank.can i fill 15h/g
    can any intrest limit for submit of 15h/g.

  69. Helo vivek. In my father acount he was open 3 fd of 1 lakh each for 1yr at 9 % interst rate.the 1 policy made on 2 june 2013 and the rest two made on 5 sep 2013 nw all 3 matured but when i checked i get the 107760 on 1st and on rest two 108236 each he told me that 20% tax dedcted .my father has no other source of incme. How could i get he nt updated pan in bnk.and how the deducted amount is 2 much in first one

    • If no PAN is given to the bank, TDS will be deducted @ 20%.

      You need to apply for PAN, then take TDS certificate from Bank, file return & claim refund.

      Even for TDS exemption of Form 15G/H, you need to have PAN card.

  70. Your article is very good. I have a question. The interest earned in a year from SBI was Rs. 8412.00, still they have deducted Rs.1047 as income tax. I never had this idea and deposited my IT return of the current year well in time without including this income as well as this tax. I am in 30% tax slab. Please let me know what should I do?

  71. Mr Vivek,
    This month and next month I am expecting some funds for which there will be TDS deduction of 10 %. This TDS will be about Rs 1,00,000. I can file income tax returns only by next March 2015 for the FY 2014-2015. After the filing, income tax department shall take another 4-6 months to process the application and refund me. Is there any way I can get this TDS amount refunded to me at an early date. My TDS deductions are more than the actual tax I pay.

    Thank you very much.

    • Hi raj, There is no option to get the tax refund early. If your TDS amount is Rs 1 lakh, which means you have Interest income of Rs 10 lakh.

      On Rs 10 lakh, even after getting deduction u/s 80C of Rs 1 lakh – your taxable income will be Rs 9 Lakh.
      tax on Rs 9 lakh will be approx. Rs 105000.

      So it seems that no refund will be due. (unless I am missing any other deductions you are claiming )

      • That’s true. My taxable income will be much less than Rs 9 lakhs. Because there are so much expenses for me which have to be deducted for arriving the total taxable income. Also Sir Rs 10 lakh is not interest income alone. Rs 10 lakhs includes commissions earned by me for my consultancy job. Companies deduct TDS and pay my commission. I have a proprietorship firm. Actual tax payable by me would be much less.

        • Ok. In that case, there is no option to avoid TDS. and it will be refunded only after filing of returns.

          For eg. for FY 2013-2014 , I filed return in July 2014 and got the refund in Sep 2014.

  72. Dear sir greeting, please tell me how can save TDS on my interest, actually i have my own only one house and i am going sell me this house and when till i mean if 1 or two years i will not buy another house so this amount i want to keep in bank and band and govt must deduct TDS because if i put my money whole one years because house sell amount near around 25 lakhs so if i make fd in any bank for 1 year s it will get near around 225000 Rupees interest for 1 year so how can i avoid TDS because this is my house sell amount and i did not earned from business please reply me i will very thankfull to you thanks

  73. R/S, i am qareeb i want to know can continue my NRI A/c because before i was worked in overseas and i was open in India NRE account but before a two years i was came finaly from overseas but still my NRE account running because i was keeped some amount in my NRE account and before a 6 – 7 years i was gave some large amount to my relative as a loan so now he returned me and i want to keep this amount in my NRE account because as you know on NRE account not tax deducted so i can deposit my local money in my NRE account, shall i can use any of my friend NRO account and from his NRO account can transfer in my NRE account and it will be leagley please reply me. thanking you

    • Hi Qareeb, It is not advisable to keep the NRE account running after you become Resident in India. Also, there will be admin issues in terms of your address in NRE Account – Is it still overseas address ?

      For transferring money from NRO to NRE, you need to get CA certificate regarding all taxes have been paid on money in NRO account.

  74. Hello,

    I am a 30 yr housewife and do not have a pan card. My account was opened with help of voter id card. So will bank deduct TDS @20% even if interest on my FDs is below Rs.10,000 or it will be deducted at 20% only if interest is more than 10,000.

    • Hi Ritu, If your PAN card details are not updated in the bank, they will deduct TDS @ 20% if the interest amount in 1 year is more than Rs 10000.

      You need to submit your PAN card details to the bank.

  75. Hello Vivek,

    I am lucky to have found your forum and helpful advises here. Since I away from India for long, I am not clear on the Income tax in India.

    We have rented out our apartment and have rental income 3.50 lakhs annually in NRO. The bank has been deducting TDS. Can I file ITR 2013-2014 now? which ITR form? Can I submit 15 G form? We are paying LIC premiums so as tax exemption, can I submit 26AS to Bank.
    Please advise. Thanks

    • Hi Shalini,

      1) You can file the return for FY 2012-2013 ( AY 2013-2014) as well as FY 2013-2014 ( AY 2014-2015).
      2) You cannot submit Form 15G/H for rental Income .It is just for Bank Interest TDS for Residents only.
      3) Form 26AS is for you to know the TDS deducted by various people. No need to submit it to anyone.

      Income from House property – You can claim 30% standard deduction u/s 24 as well as full amount of Interest paid on this home loan.

      Now, please let me know on which amount & how much TDS is deducted ?
      You can file return showing your Income from rent & Interest and claim deduction for Insurance payment. Calculate the tax & take credit of TDs deducted.
      Any excess TDS, you can claim refund.

      You can file return in ITR 1 if you have only 1 house property. Else you need to file in ITR 2.

  76. Hello Vivek,
    i wanna spend about 5000000 in fixed deposit. Plz guide me where to invest it & suggest me some tricks to avoid or reduce the TDS. As I Belong to rural area and not much educated so i don’t have much knowledge about it. Plz guide me. I’ll be very thankful to you.

    • Hi Aman, on FD of rs 50 lakh, the interest will be approx. Rs 4.5 lakh. even if you split FD in different banks to avoid TDS, the interest is still taxable. You will need to show that Income from other sources & pay taxes accordingly.

  77. Hi,

    I have FD’s with net interest earned is Rs 9000(<10000) in a financial year. Bank will not deduct any TDS since it is less than 10000. But still is it taxable? Interest earned through this is less than 10000 will it be taxable or not? Do i need to put this in my ITR as additional income and pay tax?

  78. Hi,

    All the information are very useful here. Thanks for this discussion and your answers.

    I have one question. If I have a FD for 5 years, do i need to show interest income every year in my tax return or i will show it at the end of the 5th year when the FD will mature?

    Could you please clarify.

    Thanks and Regards,

  79. Hi Guyzz,

    Whats my doubt is i have put FD for only two months and my total interest is is 2200 for that two months, will they deduct TDS for that interest???

    • No in that case TDS will not be deducted. TD will only be deducted if total interest earned in an year is Rs 10000 or more.

  80. Sir, My father turned 60 this june. I want to invest 2 lakhs in senior citizen FD? How much TDS will be deducted? Can it be avoided? What if I invest 1-1 Lakh in two different banks?

  81. Hi I quit my job in october 2013. Currently I have certain savings on which tds is being deducted by sbi. As the limit have increased beyond 10000. If I submit 15g stating 0 income since currently I am unemployed. Will tds be deducted or . The savings I have is my income for the financial year.please throw some light on this part whether for current financial year I will have to pay tax or not

    • Hi Vijay, How much is your interest income?
      You can submit Form 15G to the bank stating that Income is below taxable limit. As Interest earned is also an Income so donot write 0.

  82. hi can anyone guide me here .. i have around 10lakhs for investment and i want fixed returns on monthly basis and so how much should i invest for getting monthly returns of around 9 to 10,000 in fixed deposit or any other investment schemes …. and wat will be the TDS for that investment…… thanks in advance …. 🙂 🙂

    • Hi Dev, what is your current taxable income and in which tax slab are you in ?
      For how long you want to keep the investment?

    • Hi Prashant, TDS is not applicable for RD irrespective of amount. However, any interest earned is still taxable and you should to show under Income from other sources. and pay the taxes accordingly.

  83. sir , my gross salary is around 32k ,i would like to know whether rd or saving plus account will be more useful for me for short term period e.g. 1 year

    • if you are investing for 1 year, then you should go with FD / RD . if you have lumpsum amount to invest, you can go for FD. If you want to invest monthly, you can choose RD.

  84. 1st of all hats off to you sir for giving solution to so many questions asked by people like me. really you have been very helpful. You have covered maximum topics about income tax which are circling in the mind of us. Thanks again sir. So today I have a new question. My father is a retired govt. employee. And he is getting pension which doesn’t fall under income tax. But he has a TATAAIA policy which he is going to surrender in the next month. The amount will be around 1,35,000 which will be transferred to his bank a/c. the sum assured was 1.1 lac & was opened in 2011. And it was a single premium paying policy for 1 lac. So my question is is he suppose to give TDS for that surrender amount which will be credited to his bank a/c through NEFT? Thank you.

    • Hi,

      Could you please let me know

      1) Name of TATA AIA policy?
      2) Did he claimed tax benefit u/s 80C of premium paid in 2011?

      Also, note that normally on such receipts TDS is not deducted. if the income is taxable, you need to add that as income in IT returns & then pay tax accordingly.

        2) No, he did not claimed tax benefit of the premium paid.

        And one more thing, I was wrong, from next month his pension will fall under income tax slab. If he needs to pay his income tax for that surrender amount then which section of Income tax will imply to this situation. Please guide me. Thank you.

        • Hi,
          In case of ULIPs, if you surrender your policy before completion of five policy years, surrender value will be added to your income and taxed as per applicable slab rate.
          So it is advisable to surrender only after 5 years.

  85. Hi I have a query
    I fall in 20% tax slab. My q is does bank only deduct 10% on interest earned from FD? What about the other 10% deduction? As per my knowledge the other 10% would get deducted by Income Tax dept or how does it work? Kindly clarify.

    • You need to show the interest income as Income from other sources in your Income Tax return. Need to calculate the tax & claim the TDS deducted by bank.
      Then you need to pay the balance tax. Income tax dept doesnot deduct any Tax. You need to calculate the tax & pay the tax.

        • Hi Raj, If your total income from salaries is say 800000, then employer would have deducted 85000 as TDS. You will be in 20% slab.
          Now if you have FD interest of rs 1 lakh , Bank will have deducted TDS of Rs 10000 (10% only)

          But, when filing the IT return, you need to show as follows:
          Income from Salaries – 800000
          Income from other sources – 1000000
          TOTAL – 900000

          Tax on 900000 = Rs 105000

          TDS deducted by employer – 85000
          TDS deducted by Bank – 10000

          BALANCE Tax to be paid – 10000

          You need to pay the Rs 10000 amount as Tax by filling challan (online / offline)

  86. my interest on Fixed Deposit exceeds the SD by Rs.1,20,000/- for the Fy 2014-15. can I submit form 15 H to avoid TDS. I am doing Business and had already Paid Advance Taxes and have TDS certificates for Rs.80,000/- being the Business Proceeds Income/Commission. Please advise as to what should I do now?

    • Form 15G can be submitted by Resident, non-senior citizen investor if following conditions are fulfilled:
      1) The final tax on his estimated total income should be NIL ; and
      2) The aggregate of the interest etc. received during the financial year should not exceed the basic exemption slab

      Otherwise, you can always file Income Tax return & claim the TDS deducted.

  87. Hi,

    I want to open a FD of Rs 1 Lac for 5 years at 8.75%.Want to clarify few things:-

    1-How much TDS will be duducted.Below is the breakup of financial year interest earned:-
    2014-2015 3430.06
    2015-2016 9371.73
    2016-2017 10176.81
    2017-2018 11118.69
    2018-2019 12124.61
    2019-2020 7932.10

    2- Do i need to Submit 15G form to save TDS(My income is taxable)?If Yes,When?
    3- Do i need to change the amount to save TDS ?(the interest earned in financial year is less than 10K)and then submitting 15G form filling can be avoided.

    • 1. if the current rule does not change, the TDS will be deducted in 2016-2017, 2017-2018, 2018-2019 ( years in which Interest is more than Rs 10000

      2. You can submit Form 15H only if following conditions are fulfilled:
      a) The final tax on his estimated total income should be NIL ; and
      b) The aggregate of the interest etc. received during the financial year should not exceed the basic exemption slab

      3) Even if the Interest earned in less than Rs 10000, you need to show the Interest as Income from other sources in your tax return. and pay taxes accordingly.

  88. Hi Vivek Sir,
    Can you please provide the govt. website link through which I can see previous year tax returns and the amount I paid to govt. and if I pay extra in tax and also submitted the tax proofs what is the way to get the extra amount back in my bank account.

    Please help.

    Zeeshan Khan

    • Hi Zeeshan, If you have submitted the tax returns online, then you can see them in your Income tax portal login. If you have submitted offline, then you should have physical stamped acknowledgement of return.

      When you submit return, you need to claim the taxes paid & claim refund if any. The refund is then either directly credited to your bank account or cheque sent.

  89. Hi,
    we have a FD 1= 55000 in April 2014, and FD 2 =60000 in Nov-2014.
    Is any tax is deducted on my F.D interest ?

    plz clear my doubt

    Thanks & Regards,

    • Based on the FD interest rate, please calculate the interest accrued till 31-Mar-2015
      if it is more than Rs 10000, then bank will deduct TDS @ 10%

      Whether bank deduct TDS or not, FD interest is taxable and needs to be included in your total income under Income from Other sources.

  90. Good Day Sir,

    If my parents are senior citizen, Mother is house wife and Father is retired gove. employee (Earning pension). If I put Fixed deposit in name of my mother for amount of appr. 10 L, is there any tax liability on me or my father? It is advisable to split amount in various bank i.e. Central Bank, Canara bank, SBI etc. or can I put in one bank? Kindly advise.

    • If you give money to your mother and shemake FD in her name, then there is no tax liability on you or your father.

      As the interest on Rs 10 Lakh will be approx. Rs 1 lakh annually, the Bank will deduct TDS @10%.
      However, you can avoid TDS by submitting the Form 15G/H to the bank. If the TDS is deducted, you can always file return & claim refund.

  91. Hello,
    I want to make Tax saver FD for 5 years with ICICI bank @8.75 % pa(quarterly compounding) in Dec 2014.FD Amount is 50000.
    1.Will the TDS be applicable.If yes,in which year after doing FD it will be deducted.
    2.TDS is deducted if Intrest earned during the financial year is >10000.So if after 5 years if my intrest amount is 30000(supposed),will TDS be applicable on this amount,Inspite of intrest earned in financial year is less than 10000.
    3.Suggest some Best options to save tax.Ready for Investment for tax saving for 3-5 years.

  92. hi vivek
    my mother aged 47 years has made an FD of 200000 @ 9% on 8th january for 1 year.
    she is a widow pensioner getting 24000 p.a and apart from this there is no source of income.
    she started getting 1489 per month in her a/c from 8th feb 2014 but from the month of april 2014 she started getting 1340 as per the record of passbook update i did on 16/12/2014.
    On interrogation with bank officials i came to know that TDS of Rs 149 is deducted per month.
    But i had already submitted 15G in bank in Jan 2014.
    They said that you should have submitted 15G once again before march 2014.
    Now what should i do .
    what is the process of claiming the deducted amount ?
    which financial year and assessment year shuld i choose while filling up the form online?
    which form to select ITR1 or ITR2?

    • 1) You need to submit Form 15G/H for every financial year,
      2) Now that TDS is deducted, you can file the return online & Claim refund.
      3) You need to select financial year 2014-2015 ( Assessment year 2015-2016) when filing return. You can only file return after 31-3-2015. the due date is 31-7-2015
      4) You can select ITR 1.

  93. Hi Vivek,

    I have two tax saver fds with my bank. The total interest that I am getting for both the fds for 5 years is approx 31000. So the interest per year comes down to roughly 6000.

    The bank has deducted Rs. 1400 as tds even though the per year interest is less than 10000. Also my PAN is updated with the bank and its there on the FD advice as well. The tds of Rs. 1400 roughly amounts to 20% for the interest received which again isn’t right. What should I do to get this corrected.

    • Hi Vivek, If you have PAn updated in your account and the interest per year is less than Rs 10000, then TDS should not be deducted.
      You should contact your nearest branch / call customer care.

  94. About splitting FDs across
    branches of same bank, it is
    found that some banks
    follow the practice of Rs.
    10,000/- interest per branch
    criteria while others club
    interest earned across all
    branches to to arrive at the
    figure of Rs. 10,000/-.

    So far as I know, it has to
    be per branch of a bank.

    What is current practise by banks ?

  95. my friend saved 2 lac from pocket money. he is unemployed she dont have pancard. she dont want to pay any tax or tds. so how to invest 2 lac for short period 2 yr to save from any tax or tds!(and without pancard).

    • Hi, First it is better to have a PAN card (even for future purposes)
      If she is investing Rs 2 Lakh and earning income of just Rs 20000, then it will ne be taxed anyway (whether you have PAN or not).
      However, you cannot do FD as TDS will be deducted @20% if PAN is not submitted.

      You can invest in
      1) High Interest saving account (like Yes Bank offering 7%)
      2) NSC

  96. Dear Vivek,

    I am an NRE and soon will be settling in India. I want to deposit Rs.30 lakhs (6 lacs for one year, 6 lacs for 2 years and so on). I will withdraw principle and interest at te beginning every year for meeting living expense for the year. Is there any tax complication? If yes, how would you advise to deposit and withdrawal to avolid tax?


    • Hi Jagdish, If you are setting in India shortly , then you should keep in mind that

      1) you need to inform the bank re change in residential status within 6 months
      2) Once you do that, your NRE FD will be converted to normal FD. then the Interest on such normal FD will be taxable in India and TDS will also be applicable.

  97. Mr. Jain,

    I am an NRI, and planning to return to India for good by end of this year. I will have about 37 Lakhs altogether (from savings and settlement), which I would like to open FD in January-2016 (with monthly payouts in HDFC) i will earn about an interest of IRS 3,21,527 by the end of December 2016.

    Please advice:
    1. Is the interest earned taxable?
    2. and what if i am able to find a job with an annual income of IRS less than 2 Lakhs, should i still have to pay tax on the interest earned from the FD.

    Awaiting your reply.

    Thanks and Best Regards

  98. Dear Vivek,

    I had a Fd of 1,00,000/- from jan 2012 to 2014. Then, on 19jan 2014 it got matured and i take the interest in my account and renewed the fd for one year with 9% interest. Now, on 19 jan 2015 my fd got matured but i didn’t get the interest as mentioned on my fd receipt. when i talked the bank personals they said tds has been deducted, but they were unable to satisfy me that how it has been done.I don’t have any other fd in bank. Can you please help me to understand the basic problem. I am novice in this field.


    Amit Sharma

    • TDS is deducted by bank if the interest in 1 financial year is more than Rs 10000. In your case, it should be from April 2014-Jan2015
      Some bank deduct TDS at the time of FD maturity which is not always correct.

      Which bank you have FD with?
      How much TDS is deducted ?

        • Is your PAN updated in bank records. it may be possible that TDS is deducted @20% for your interest income during Jan 2014 to Mar 2014.
          You should visit the bank to check the reason.

  99. Hi Team,

    If I & my wife has opened a 5 years FD for tax saving. I am the first person while she will be the second person in FD ao I will be able to get the tax rebate for that amount under 80C.
    Now after 5 years when the FD gets mature can the interest be shown as the income of my wife or it has to be shown as my income.

    • if you are the first holder, thenyou can claim 80c benefit in the year of investment.
      Any FD interest should be added to your income every year (not only on maturity)

  100. Dear Sir,
    Opened dated on 01.01.2014 FD RS.1,50000.
    maturity date is 31.12.2014,maturity amount is Rs.1,63,125/-
    my question is maturity full amount taxable ?

    • Hi Keshab,

      FD interest is taxable and you need to show the income in the ITR whether TDS is deducted by bank or not.
      TDs is deducted @10% by bank if t he interest in 1 financial years is more than 10000.

      So in your case, I think the interest in 1 financial year will be less than Rs 10000, so bank will not deduct TDS.

  101. my total taxable income is above the limit.
    and interest accured from FDs are also above 10000.
    is there any requirement to submit form 15G.??

  102. My father has been resently expire. he was gov. employee as a deputy secratary. we got 30 lakh amount of gratuty and my mother will get 40,000 per month of pension. we r going to do 20lakh FD in syndicate bank. i have confirmed with branch manager about tax. he was telling to me you do 20lakh FD and submit with 15G form. then he said also we will put wavier in it. then TDS will not cut. Please you suggest sir, wat to do? it will be taxable or not.

    • Depending on the age of your mother, she can submit Form 15G/H. See details in post below

      Regarding pension, Family Pension received by the family members is taxable in the hands of recipients. It is taxable under the head “Income from other sources”, but standard deduction is available which is one-third of such pension or Rs. 15,000, whichever is lower.
      which means, Rs 26667 per month will be taxable.

      So your mother’s total income will be approx. Rs 5 lakh per annum. (assuming 180000 for interest & 320000 for taxable pension)

      In such case, bank should not accept Form 15G/H. Even if they accept and do not deduct TDS, you need to file return showing all FD & Pension income and compute the tax and pay the tax.

  103. Dear Mr.Vivek

    My income is 3.5 Lakhs and spouse is House wife has no income.If I transfer funds to spouse’s Bank deposit account and earn 1.6 Lakh interest, Can spouse submit 15G to avoid TDS despite club income is above taxable limit ?

    What are all the ways to show spouse income by Interest earned from some of the deposits which funds generated by selling her gold and some savings from the money given for routine expenses ?


    • To earn Rs 1.60 lakh interest, I assume you will be transferring Rs 17-18 lakhs in her account.
      A the amount is high, it will be picked up by IT dept compliance software, if no returns are filed by your wife.

      While she can submit Form 15G to the bank for non-deduction of TDS. but still the filing return is advisable.

      If you are transferring money without consideration, then the interest income should be clubbed to your income.

    • Yes, you can split amount in different banks. Each bank will deduct TDS only if the interest for that bank is more than Rs 10000.

      However, even if the TDS is not deducted, the FD Interest is taxable. You need to show the FD Interest as “Income from other sources” in your IT return and pay any taxes due.

  104. I am retired govt servant,sr. citizen with no income . pl clarify whether govt pf and
    gratuity earned will be considered as income in future years or only the interest earned
    from them thro say fd will be considered as other income for IT.
    If so what is the justification to pay tax on the interest earned from pf and gratuity so earned
    for livelihood.
    Pl explain if there is any govt changes in such policy.

    • Amount received from PF & Gratuity will not be subject to tax.
      BUt any interest earned by depositing that money will be taxed.

  105. Hi Vivek,

    I have received Rs. 5 lakhs as gift from my relative.

    My question is,
    (1) while filing my IT returns, in which section of ITR1/ITR2 I need to mention this gift amount (as capital receipt)?
    (2) How to make IT dept to be aware that I have received this amount as gift before they send me the notice?

    • 1) There is no requirement/option to mention the gift amount in ITR
      2) You just need to keep the record to yourself which can be given to IT dept if requested.

  106. Dear sir

    I am asking you that what is the maxmium cash deposit in saving account example if my bank balance rs 2 any tax deducted in my balance. and if i make fixed deposit rs 50 thousand three seperate time same name can it is taxable for TDS on interest

    • There is no TDS applicable in Savings account.

      For FD Account, if the interest of all FD under your account is more than Rs 10000, then TDS will be deducted.

  107. Vivek Sir, I have a query regarding the implications of Direct Tax Code. I have a PPF Account which will be maturing on April, 2016. I want to extend it for a period of next 05 years but I am afraid that till that time Direct Tax Code will come into existence and my maturity value will become taxable which is at present free of any tax. I mean to say whether the DTC will be applicable to investments made before its arrival.

    • When the direct tax code is implemented, it will be for future investments and not the past ones. So your PPF balance before the direct tax code will not be affected.

  108. Hi Mr. Vivek,

    last year i have deposited 2.5 lakh in the name of my wife(she is a house maker) as a FD & we got the TDS deduction. please advise if there is any thing we can do now to get the deducted amount also now i am planning to invest 3 lakh . please advise if i split the amount in 03 different bank can it saves the TDS??


    • Your wife can file the returns & claim the TDS amount.

      Note that if you are just transferring money to your wife and making FD, then that Income should be clubbed in your income. In case of scruitny, this may be picked up.

  109. Dear Vivek ,
    My father is going to retire on May 30th of this year , We want to have a FD for senior citizen of Rs 20,00,000/- ,from which nationalized bank and scheme we can get high interest rate which must also be tax free he has no any other income from any source . Please suggest us from your valuable tips.

  110. Hi Vivek,

    I have been following your articles and after reading them few questions have popped up in my brain.
    Firstly I am an NRI but have no NRE/NRO accounts , do I repatirate my earnings in normal savings account I hope thats fine with tax authorities in India?
    Seconldy I have few FD’s in INDIA and I am looking for tax saving option on those FDs. I was planning to invest in five year FD but I am not sure if any FD for 5 year of greater is tax free or do I need to visit the branch and open some specific type of tax saving FD. The problem with me is I am overseas and cant visit bank branch so I was wondering if I can open a normal 5 year FD and claim tax rebate?

    Thanks in anticipation.

    • Hi Vikram,

      Ideally when you moved out of India, you should convert your resident account to NRO account.

      It is better to open an NRE Account as the Interest on NRE FD is tax free. You can open NRE account when you are overseas by submitting the form on email and then bank will get it pickup by post.

      For your FD in India, how much is the Interest and total income in India. If the total income is less than Rs 2 lakh, you donot need to invest in tax saving options.

      Note that for 5 year tax saver FD is special FD marked by bank so that one cannot break it. You cannot create normal FD for 5 year or more claim tax.

  111. I am having two fd’s of 50k each in same branch for same period @10% .so interest is above 10k will tds be deducted or not?

    • Hi mohit, if the total interest is above Rs 10000, TDS will be deducted by the bank. Also as per change in Budget 2015, TDS will be deducted by bank if the Interest for one customer ID is more than Rs 10000 (irrespective of number of FD or different branches).

  112. sir i have 6 lakhs FD in sbi interest 8.50% for one year open date 14/02/2015 …..i wish to know my TDS deducted on 31/03/2015 or not???????? i will submit form 15g in april 2015

  113. Hi Vivek,

    I have opened NRE FDs In India. The interest is non taxable right now. However, I am returning to India next month. Will my interest still be non taxable since I opened them while I was NRI? At what point I have to start paying tax? Please advise.



  114. i will be doing an FD of 5Lakhs @ 8.75% interest, as the interest income is going to exceed 10000, the bank will surely deduct the TDS, My income is 3lakh per anum
    I would like to ask??

    1- Is there a logic in giving the Form 15G, as it is required for interest less than 10k.
    2- how could i know, how much the bank will deduct.
    3- I had to file the income tax return, to get the deduction back.

    • 1. as your income is more than Rs 3 lakh, you are not eligible for form 15G
      2)Bank will give you the TDS certificate after the year end.Alternatively, you can check your form 26as online for all the TDS deducted.
      Bank will deduct 10% of the interest accrued / paid as TDS (if PAN is given in that account).
      3) You can always file the return & claim the TDS amount.

  115. Hi Vivek, For the current FY 2014-15 I have furnished my investments in such a way to my employer that my taxable income comes to 2,45,731/-

    Now I opened a FD in Sept 2014 for 85K which will mature in Dec 2015 and will fetch me 95K.
    In addition on an average I get 3K as an interest annually on the balance that i maintain in my savings account.
    Also I have opened a new Recurring Deposit from Jan 2015 to Dec 2015 of 20K monthly.

    My query is the interest that i will get on my first FD of 85K will be calculated on prorata basis or not? and how will the RD be calculated?

    Will my total interest exceed 10k?

    Also I get around 2K from two different bank accounts each as interest on the savings account. So will that also be calculated?

  116. Can I request bank to deduct TDS on the day of maturity of FD and not in the month of March every year?

  117. Hello sir,
    I have opened 4 fd in current f.y. (in month of may, jun 2015) for short period But i have closed all before feb 2015 & before its maturity. but all accumulated interest is ending upto 15000.

    my query is whether interest on fd is for only live accounts or closed pre closer accounts also.

    ( Note sir, i have closed accounts before its maturity but at time closing of accounts accumulated interest is 15000)

    • If the interest acrued or paid in 1 financial year is more than Rs 10000, TDS will be deducted. It is irrespective of live acount, closed account etc.

  118. I am a senior citizen 60 year old a pensioner and i have no taxable income by pension but with my retirement and govt pf, gratuity done about 1500000rs as fixed deposit. So then may i submit 15H form or not.

    • On FD of Rs 15 lakh, the interest will be approx Rs 1.5 lakh. if you donot have any other income, you can very well submit Form 15H to non deduction of tax.

  119. I have no taxable income by pension but with my retirement and govt pf and gratuity as fixed deposit my income touch above rs. 3lac in a year so may i submit 15H form or not for tds saving on fd.

  120. thanks for your article its very useful
    i have a doubt on this
    i have fixed deposits of Rs.500,000 in a branch but iam not given my PAN to the banker therefore he deducted TDS @20% for the financial year i want to claim refund of that TDS because i have no other income except this intrest on F.D But, if i see my form 26 AS not credit is available to my a/c
    How can i get the refund

    • As you have not given your PAN details to bank, thats the reason they dedcuted TDS @20%. As no PAN details was available with bank, they could not mention your PAN while depositing TDS and thats why it will not appear in your Form 26AS.

      Now, you need to submit PAN to the bank and ask them to revise their TDS return to reflect your PAN agaisnt that TDS deducted. once they revise their TDS return, it will be reflected in 26AS.
      Once it is showing in 26AS, you can file return and claim the refund.

      Option 2: as no PAN details are available, Bank will not be able to give you TDS certificate, but you can ask them to provide a letter stating the details as well as TDS amount. You can then file the return and claim refund. As this is not reflected in 26AS, the amount will be different and the case will be taken up by ITO. You can then send the letter from bank tot he ITO.

      You should try the option 1 first.

  121. I am 56 yrs retired banker getting Preferential Rate of Interest on my deposits. Even I distribute savings among various branches, because of same PAN and customer ID, interests paid will be clubbed and subject to TDS. Pl. adv. how should I distribute my savings ( about Rs.20 L) to avoid TDS on interest. Point is whether I can get matching Rates if I invest with other institutions with same liquidity. Even if I invest in my wife’s name (housewife/no income) whether I can get better interest with liquidity. Which are Private Institutions paying returns matching my PRI and liquidity.

    Pl advise.

  122. Dear Vivek,

    Recently I have returned from Abroad. I have earned since 6 years in abroad and splited the amount and deposited in diff banks as FDs in my and my wife names. All the FDs are started on June-14 on-wards. I request you to please suggest how to file my return? Do I need any auditor help or how can I calculate the taxable interest. No other income for me. Also suggest can I go for e-filing option and please inform me how to file the e-filing? I am waiting for your reply please.

    • Hi, Please let me know if the FD are normal FD or NRE FD ? What other income do you have ?

      You should be able to calculate the income and file the income tax return online.

  123. 1. I got interest on ppf credited on 31 March 2013, So i will declare it in ITR of Assessment year 2013-2014, given the fact that Previous year in which this interest was credited is 2012-2013(1 April 2012-31March 2013) ??

    2. I got interest on saving account credited in my Account on 30 June 2012 and 31 Dec 2012. So i will declare it in AY 2013-2014 ?

    I am filing a revise return. Kindly help

    • 1. yes, the interest credited in March 2013 should be entered in FY 2012-2013 (AY 2013-2014)
      2. SB Interest credited in 2012 will be in FY 2012-2013 (AY 2013-2014)

  124. Hi,
    1. Between 2012 to 2014 I have given 26 lakhs to my mother for her future expense .
    Same amount made FD In one bank and branch . It is long term deposit approxmently 8.5 years, amount will be doubled in 8.5 years {52 lakhs}
    Amount will be doubled .My mother is house wife and my brother is also sending 25k every month,
    Other then this she not having any income .

    2. In case if she gifts to me after 9 years will it be a taxable .


    • Hi Subbu,

      There is no tax applicable when you gift money to your mother.
      Also, as per current laws, there is No tax applicable when your mother gift to you.

      However it is better to transfer money via banking channels and also prepare a simple gift deed.

  125. Hi vivek,

    I am a house wife age around 30 yrs. I wish to open an FD of around 30 Lakhs which i got by selling property. Is there any way of saving TDS on interest earned?

    • Hi Anshu, As the Interest earned on this will be approx 2.5 lakhs, you cannot avoid TDS. However you can later file the income tax returns and claim the TDS deducted.

  126. Hi,

    i have kept around Rs 8 lacs fixed deposit of my father’s money on my name. and after maturity i hv returned full money i.e (principle + interest) to my father through banking transaction. During the financial year i have submitted Form 15-G in bank thus no TDS was deducted on the fd. Now whether i can skip the tax on the interest earned on the fixed deposit since full money has been repaid to father. My father do not comes under Income tax bracket, since he is a senior citizen. Please suggest.


    • Hi Kailash, if the FD was in your name, you are liable to include the interest income in your IT return and pay tax accordingly.

  127. Hi,

    We have Saving bank joint account on my name and my wife name in SBI. my name as first name.

    We have Fd 60 k on my wife name and 40 K on my name.

    I have 1 lakh Fd on my name in another branch of SBI. it is single saving account on my name.

    we will not come under taxable limit.
    Till now our interest isl not more than 10,000 so we have not submitted form 15G. in two branches(we are not senior citizens)
    Recently i came to know that 2015-16 onwards they calculate bank wise 10k limit not branch wise.

    my doubt is

    1) should i give form 15 G in both branches ? or in one branch quoting both branches Fd’s ?

    2) should l include my wife FD details in my form 15G ? her ID and pan no is different but sb ACCOUNT is joint and 2 nd name.
    3)10K limit is based on ID or SB account of 1st name holder ?

    please clarify

    thanking you


    • 1) If your PAN is updated in both branches, you just need to give 1 Form 15G to one of the branches.
      2) if your wife FD interest is more than 10K, then she need to submit form 15G in her name.
      3) 10K limit is based on 1st account holder

  128. i am retird person i have fixed deposited my entire amount of retirement funds on jan to april .is there any possible for tax deduction on my fd amount.

  129. Dear Vivek,

    I would like to thank you a lot for your so kind answers to all the questions asked.

    I could not managed to get the infor I am searching for quite some time!
    Would you kindly help me with the following issues i am having..

    1. I am staying and earning my salary (after deduction of tax) in abroad for many years now. I transfer my money to my Indian SBI account (normal savings A/C.) through internet banking (sometime I noticed bank deduct nominal Forex tax) and depositing in FD scheme. Since I am not using NRE/NRO account facility and not earning any money in India, I am submitting 15G declaration to the bank to avoid TDS. I am wondering i am eligible to do so. Because i got to know from the web that the 15G form can only be submitted by Indian resident only!

    2. My spouse also stay with me in abroad and she also hold SBI account (normal savings account) but are not earning any money. Can she deposit money in her acccount (under FD scheme) and submit 15G form?

    3. For Another question, I would like to ask an answer from you is,

    Is earning of 2.5 lks (for one financial year income for below 60 yrs) includes any interest earned in from the saving bank A/C? Or any earning from saving A/C is tax free?

    Many thanks for your time and i shall be waiting or your kind reply

    • 1. 15G can be submitted by only Resident individuals. Even if the TDS is deducted by bank, you can file return and claim the TDS refund.

      Alternatively, you can open an NRE Account and transfer funds to that account fro overseas. NRE FD Interest is tax free.

      2. Again as your spouse is also non-resident, she cannot submit form 15G.

      3. All Interest from Saving account is taxable and should be added to total income. However, you can claim deduction upto Rs 10000 u/s 80TTA.

  130. Please confirm whether I can claim refund in the month of April15 by filing return for the assm year 2015 16 for the TDS Deducted by SBI amounting to Rs. 1,212/- which is showing in 26AS in FY 2014 15 vide Assm yr 2015 16 & status showing “F”.

    • fi FY 2014-2015 (AY 2015-2016) you need to file return by 31-7-2015.
      You can only file return once the forms for AY 2015-2016 are issued by tax deptt. You can then file the return and claim the refund.

  131. Sir,
    Myself is a research scholar of IIT Kgp. Basically I don’t need to pay income tax for my stipend. Now I have opened a FD in SBI of Rs 25000 under e-STDR scheme for 6 months. So do I need to submit any 15G form at the beginning of year, though interest earned by me is less than Rs. 10000 for a particular year. I have another question how many FD can I open in a financial year? Is there any limit? Hope you will give reply as early as possible.

    With regards and thanks,
    IIT KGP.

    • There is no limit on number of FD you can open.

      it is better to submit form 15G if the interest is more than 10K.

      But if the TDs is deducted, you can always file the online return & claim the TDS as refund.

  132. If I opened FDs jointly with my father as his name appeared first account holder and amount debit from my saving account then after maturity of FDs amount (principle plus interest) credit to the same saving account. What is the tax liability on me? After maturity of FDs principle amount belongs to me or in father’s name?

    • As your father name is the FIRST holder of FD, the interest will be his income. Also, the FD amount should belong to him.

  133. Dear Sir,

    My mother and I, jointly have an FD account of Rs.2 lac, in which my mother is the first depositor. Since she did not have the PAN card, tax of 20% was deducted from our interest which will mature in july . Also at the time of opening the FD A/c, the bank did not ask us to fill the 15G form. Now she got the PAN card so can you please guide me on how to file for return.

    • Hi Nikila,

      If the Interest is more than Rs 10000 and PAN is not updated in the account, then TDS is deducted @20%.

      As the PAN information was not available, it cannot be tracked against your mother’s new PAN. Now that your mother has got PAN, you need to submit the PAN to your Bank and ask them to revise their TDS return so that TDS amount is reflected against her PAN.

      After the bank confirm that they have revised their TDS return, You can check whether the TDS is shown against her PAN, you can check her Form 26AS.

  134. Sir,
    I am a retired Government Servant and my age is 68. I deposited my gratuity, pension and other benefits first at Kancheepuram Central Co-op Bank from 1-1-2010. I continued to deposit my pension and interest accrued thereafter. Till 2014 there was no talk of TDS. Now the bank become as Core Banking and started deducting TDS. The total interest earned crosses Rs.20,000/- I also receive my monthly pension of Rs.16,000/- So far I have not filed any IT return. After deduction of TDS, I filed 15H and advised to file return. From which year I have to file return. And how much tax I have to pay.
    I expect your timely reply,
    P.S. Kannan

    • You should file the return for the year for which TDS is deducted.
      For that you need to show all your income and claim the TDS dedcuted.

  135. I have joint account if i make one fd my name and other fd in the name second joint holder whose interest more than 10000
    then TDS applicable ??

  136. Can i have my retirement benefit deposited in bank in my parents name first jointly with my name(second name)to avoid tax and tds since my parents do not come under the tax bracket.Should i show this as a gift to them or please tell let me know how this can be done legally.I am a pensioner and a tax payee aged 57 yrs retired recently(voluntary retirement).My father is 86 yrs and mother is 79 yrs.

    • Hi, You can give gift to your parents and you can invest in FD in their first name and your name as second name.

      • Thank You.I am Amazed at the patience you have in answering questions which are more often then not repeated,Kudos to You Sir.In my case is it OK if i just pay the Amount to my parents by Cheque,OR should i make a Gift Deed.

  137. hello sir,
    My dad was an govt employee and he passed away last year.My mother is 46years old (housewife)and my sister is 19 years old(studying).we have decided to invest the money that had came to my mother from the govt in the fixed deposit.
    20 lakhs in my mother and sister name.So i would like to know the will tax on intrest deduced for my mother and sister.

    • TDS will be deducted by bank of the Interest is more than Rs 10000 for a year.

      As in yoru case, the Interest will be less than Rs 2.50 lakhs, they can file Form 15G to the bank, so that TDS is not deducted.

      Make sure you have submitted PAN to your bank

  138. i wanna to open a fd 10 lac i wanna interest per month pls advice in this fd the tds will be cut yes i have filled the itr every year . Is it possible the tds will be not cut which form will fill so that the tds will be not cut.


  140. Firsty awesome post, appreciate you for replying all quries… 1.My father sold his house for 60Lac and giving the money to me.Will I get capital gain tax? If so how can i avoid? 2. I come under 10% slab, Can u suggest me how to invest the amt in FD so that i would not have to pay more on TDS? 3.If i deposit some money on my kid(minor) will it be tax free?

    • Hi Tina,
      1) If your father is selling his house, he is liable for any capital gain tax.
      2) When he gives the money to you, no additional tax is levied. as it will be given as a gift to you.
      3) When you deposit the amount as FD, Bank will deduct TDS @10%. May be your father can deposit some FD in his name and then you can make some FD in your name.
      4) Making FD in name of your kid may not save tax as the income will be clubbed to your income.

  141. I fall in the 30% tax slab. My son is 22 and has no income. I have a joint account with him, he being the primary account holder. If I transfer a sum of money from my account to his account and the amount is put in an FD which earns less than 1.8 lakh interest pa, will I or my son be liable to pay tax either for the amount transferred or the interest earned?

    • As your son is major, the tax liability wil be on him for any FD interest.
      As the interest earned in lower than taxable slab, no tax is payable.

      So, no tax on transfer or interest needs to be paid by you or your son.

  142. hi vivek,

    my unmarried friend has started earning 640000 yearly. she is living with her parents so having no expenses.
    she is thinking to invest 150000 in ppf. i want to ask if she keeps rest of her money as a bank fd to get more interest rather than saving account does tds is applicable. she files her ITR. She will pay 10% tax as per the slab. if she invest 490000 in fd in that case how she will claim refund of tds and how much tds she has to pay.
    please tell if there is any other better & safe option to invest her money. she wants to create a regular monthly income source for future.

    please give your valuable suggestion..

    • Hi Prabha,

      TDS @10% is applicable on FD interest (if more than Rs 10000 in a year). Though FD is safe investment, it is not tax friendly.

      For how long she can remain invested. May be she can invest in NSC etc for safe investment.
      or consider investment in Mutual funds for long term for better return with moderate risk.

  143. Hi Vivek,

    1.Using the approach explained in “Avoiding Timing the FD”, is it possible to distribute/split the interest earned from a FD in to two different financial years instead of in the financial year of FD maturity?

    I am asking this question for my mother’s situation (house wife and only source of income is through FD and Savings A/c interests). She is a senior citizen and 15H has been submitted with the banks and hence no issue on TDS as of now.

    I am (PIO) thinking of gifting additional money to her to deposit as FD in her name. However, I would like her investment to be tax efficient as possible without reaching her annual income limit for tax purposes. In this regard, I wish to know if it’s possible to distribute/split the interest income across financial years by starting the FD as follows?

    Let’s say FD for 3 Lakhs (assuming 10% per annum simple interest for easier calculation purpose) is started in Oct 2015 and maturing in Oct 2016 (1 year term), earning Rs.30,000 interest on maturity. This Rs.30,000 interest income will be considered towards total income for the financial year April 2016 to March 2017.

    Is it possible to split Rs.15000 as interest income for the financial year April 2015 to March 2016 and Rs.15000 as interest income for the financial year Apr 2016 to Mar 2017 there by reducing the total income by Rs.15000 for each of the financial years – 2015-2016 and 2016-2017?

    I reckon, I have not understood the approach of “Timing the FD” correctly and I wish to have your feedback in this regard.

    2. To ensure tax efficient saving in my mother’s case, Am I correct to calculate, that for the Financial year Apr 2015 to Mar 2016, my mother as a senior citizen can have total income of up to 3 lakhs (ie. Total of Interests income from Fixed Deposits credited during the period Apr 2015 to Mar 2016 + Interests from Savings Accounts credited during the period Apr 2015 to Mar 2016); [I reckon that the total income could be slightly more than 3lakhs considering Rs.10,000 Interest income from Savings Account deduction under 80TTA].

    Assuming only FD Interest as only source of income, with a simple interest of 10% per annum (although it’s only 9.25% and quarterly compounding), a senior citizen can avoid tax as long as the total of all the FDs does not exceed 30 Lakhs resulting in Total Income from Interests of 3 lakhs . Am I correct in calculating this way?

    Banks seems to be telling my mother to not to exceed 20 lakhs even by splitting across banks and bank branches. I am not sure why this is the case? Is there any limit like this or is there a maximum amount restriction defined by banks/IT department for Fixed Deposits?

    Thanks very much for your help and looking forward to your guidance.


    • 1. Regarding the timing of FD- As the FD interest is taxable on ACCRUED basis (so FD interest accrued till March 2016, will be taxable for FY 15-16. In your example Rs 15000 will be taxable in FY 15-16 & the balance in FY 16-17.

      2. If oyu mother is senior citizen (60+ years), then the tax slab will start from Rs 3 lakh. So yes, there will be no tax on income below 3 lakhs and she can have FD of approx Rs 30 lakh. There is no limit of Rs 20 lakh. It is better to make FD in installments – say Rs 5 lakh each etc.

      She can submit form 15H to the bank to avoid any TDS deduction

      Also make sure that you fie the income tax returns even if no tax is payable. As the amount of FD will be high (30 lakhs), Income tax will send the compliance notice if no tax return in filed.

  144. hello sir..I want 2 make f.d.of rupees 2 lakh at SBI b
    bank for 6 months wat income I will get after maturity at today’s current rate??.and as the norms if the interest goes up to 10000 thousand..per annum it’l be taxeble at10% so if I make f.d of 2 lakhs for 6mnth not for 1yr then is it taxeble???
    and if taxeble then how can I save that

    • For Rs 2 lakh for 6 months, the interest rate is 7.25% , there the interest amount will be approx Rs 7000

      As it is less than Rs 10000, no TDS will be deducted.

  145. sir i think this is been answered earlier before for somone else , but still i have doubt pls solve it sir i have sold my site for 5000000 lakh rupees and i looking for small site to buy and build house in an other 1 year maximum. how money shall i keep in fd , for what tenure and how to avoid income tax my age is 38 and i am govt servent what are the precaoutinary measures that should be taken…..thanking you ROHITH SHETTY

  146. Please tell me if i have deposit RS 1 Lakh in fixed deposit at intrest rate 8.0 % in sbi bank then any TDS will be deducted ?

    • Hi, As the Interest will be less than Rs 10000, no TDS will be deducted. (Provided you have no other FD with the bank).

  147. Hi,

    I am planning to invest in FD, as per my salary my TDS is in 20% slab and my questions are:

    1) If I open FD in joint with my wife can i get any tax benefit as she not working?
    2) My wife has valid PAN but she is currently not earning so If I open FD with her name only so, in this case ta will be completely saved?

    • Hi Amol,

      Even if you open FD in your wife name, ideally the interest should be clubbed in your income (as per Income tax clubbing provisions). However, if she open FD in her own name, bank will not know that you have given that money and will deduct TDS in her name. She can show that her income and pay no tax, but that’s not correct. in case of any scrutiny, it may be picked up.

  148. Hi,

    I have opened a FD of 111111 @ 8.2%. The tenure is 1 year 3 months. If I see the maturity amount becomes 123052 which shows interest greater than 10K. This is due to extra 3 months. However if we compute tax in an year will be 9999.99. Kindly suggest if I am eligible for TDS and shall i submit the Form 15G for TAX waiving.

    Mohit Virmani

    • Hi Mohit,

      If the Interest is below Rs 10000 in that financial year, then TDS will not be deducted.

      But when doing your interest calculation, please consider the compounding as well.

      If your total income is below taxable limit, you should submit form 15G to avoid TDS.

  149. Very informative articles, Vivek! Thank you for all that you do. I will be reading much more of your work in the near future!

  150. Hello Vivek,
    I just received this Form 16A over my FDR. I just wanted to know I’m not a tax payer. And is it possible to have the deducted amount back? I have not even submitted 15G form. Now what can be done. Please guide.

    • Hi Reema,

      You can file the return and claim the TDS amount. It is better to file the return online as the refunds are processed faster. Choose Bank credit for refund.

  151. tds deducted earlier by a nationalised bank on the FD of co-operative society bank refunded later

    under which provision does this come????

  152. Hi, i have 1 query that my mother have FD in a co-operative bank of Rs.10,00,000 and she having Interest income about 1,20,000 (approx) in a financial year from that. Please tell me if she should liable to file ITR.

    • Hi Praveen

      1) If the FD interest is more than Rs 10000 in a year, bank will deduct TDS @10%. If PAN is not available in Bank, they will deduct TDS @ 20%. So please update PAN in her FD. Also as Income is below taxable limit, she can submit Form 15G/H to avoid TDS deduction.

      2) It is better to file return as she may get compliance notice if the FD is Rs 10 lakh.

      • How much TDS should be deducted on income from interest of Rs.1,20,000. Is it 12,000 !!! And if she submit for, 15G or 15H then also she needs to file return??

        Saving in Post office also have same procedure??

        • If the PAn is submitted with the bank, the bank will deduct TDS @10%. If PAN is not provided, then TDS is 20%.

          If your total income is below tax slab, then you can submit Form 15G and bank will not deduct TDS.

          There is no TDS on PO Saving .

  153. Hello Sir, Can you please tell me for how many years the tds can be claimed in future? For e.g:- my tds of rs 4000 approx was deducted in fy 2011-12 and 2012-13. Can I claim refund? I have not filled any itr till date. Please suggest….

  154. Hi, My mom is having Rupees 1 crore FD. She retired last year from the service and received Rs. 60 Lakhs as retirement benefits. Apart from this she receive 18000/month pension. Apart from this, we don’t have any property or any thing.
    Pl help me regarding the tax matters.

  155. Hello,
    I have one query .. As per my interest income Certificate from bank as on 31st March , 2015 is Rs. 18274.income from FD is Rs 13890, from RD is Rs 2991 and balance is from Savings bank..Bank has deducted TDS of Rs. 1389 (interest on FD) but no TDS is deducted on interest from RD
    How shall I show the same in ITR -1..
    Income from other sources – 18274
    Can I show the interest income from RD under Section 80TTA and close it..or I shall exclude the interest income from RD from the computation of income from other sources
    Kindly guide..Thanks in advance

    • Hi Vihaan,
      1) You need to show all interest (FD, RD & Saving) under Income from other sources.
      2) Claim deduction u/s 80TTA for Savings Interest
      3) Claim TDS deduction under “TDS paid” section.

      Any excess tax will eb refunded , or any deficit needs to be paid.

  156. sbi bank deducted TDS of 4400 in FY 2014-2015 @ 20% as my PAN was not updated , now few days back i have updated pan card with sbi and my TAX slab is 10 % so i need to get 10 % refund , but the 20% amount which sbi deducted is not showing in my form 26AS as at that time my pan card was not given to the bank , how can i show that TDS in my ITR ? Please suggest

  157. Hi
    I have saving bank account in SBI with MOD balance facility. I earned an interest of Rs. 41109 during FY 2014-15 out of which Rs. 2166 is from S/B account and rest Rs. 38943 is from the S/B account related deposit account i.e. MOD balance accounts. The rebate claimed under section 80 TTA is Rs. 2166 or Rs. 10000. Kindly guide.

    • Even if you make from 2 different account, Bank will deduct TDS. Also you should submit ITR return otherwise there will be high chance that you will get compliance notice.

  158. Hi Vivek,
    I want to make FD in Bank Rs.20,00,000/-.Suppose interest earned is Rs.1,80,000/- annually. Then how much I make Tax saving FD in Bank, excluding Income Limit of Rs.3,00,000/- for a Senior citizen. Please Reply.

  159. Hi,

    My salary is 8,30,000 per year
    I have 13 FD’s 130000 in 3 different branches
    am getting around 80,000 interest per year on FD’S.
    Let me know what is the best way for tax exemption on FD’S.
    If TDS is deducted by bank. Is there any way to claim ?

    Please suggest me

  160. Hi Vivek,

    Really impressed with the patience you are answering all the questions.

    I am a salaried employee working in Public Sector since 5 years. My gross salary is slightly more than Rs.5 Lakhs per annum since 2 years but my total savings are below Rs.1 lakh. I am filing ITR every year.

    I got Rs.10 Lakhs cash by selling our old house. I am planning to buy a new house worth Rs.25 lakhs after 1 year. Meanwhile, I am want to Fixed Deposit my Rs.10 Lakhs for 1 year with which I will pay my house rent.

    My questions are:

    1) Which is the best & safe bank for FD.? What will be the interest for Rs.10 Lakhs for 1 year.? Should I go for monthly pay-out or withdraw at the end of year.? Which is profitable.?

    2) How much TDS will be deducted from the interest.? Do I need to mention it in ITR.? Will I be questioned by the bank from where I have received Rs.10 Lakhs.?

    3) If I deposit the money in my mother’s or wife’s account, who are solely dependent on me, do I still need to show it in ITR.? How will I be benefited if I split deposit in different accounts (own/family).

    4) Should I buy the new house straight away or should I wait for 1 year.? (Due to place of work, I am planning it next year)

    I need your valuable advice. You can also email your advice

  161. Dear Vivek,
    I have FDs in bank where my interest will be more than 10,000/- INR in a given financial year. I am income tax payee and my monthly income is Rs, 80,000/-. I would like to ask that bank anyway will deduct TDS on my earned interest, eventhen I need to mention the interest earned on FD in my income tax return. if yes, then should I mention the interest amount with TDS or without TDS? why income tax will deduct tax twice on the interest earned? I will highly appreciate your kind help.

    • Hi Santosh,

      1) You need to show the total interest (including TDS deducted) in your return as Income from other sources
      2) Then you need to show the TDS deducted in the TDS section

      It is because, bank only deduct TDS @10%. If your total income is more and you fall in 20% or 30% bracket, then you need to pay more tax on that Income.

  162. Hi ,

    One thing which I am trying to understood is from your point which is “by Splitting FD across banks & branches” please tell me if my understanding case is correct.

    Case 1. Different Bank mean eg. 1 deposit in HDFC , ICICI , SBI less then 10k per bank FD interest.
    Case 2. Different branch which same bank like HDFC santacruz branch and HDFC bandra branch.

    Please do reply. Also if possible please mail me also that will help in tracking your comment in faster way.

    Raunak Singh

    • Hi Raunak,

      Yes you are right.

      Not the case 2 is not relevant as the banks are combining the fd from different branches to calculate the 10K threshold.

  163. sir,

    i heard that since june 2015 Banks will deduct TDS on RD if interest exceeds 10,000.

    I have both Fd and Rd in same bank. individually my interest will not exceed 10,000

    From Fd interest is 8000 and Rd interest is 3000 per annum

    will they combine both and calculate as 11000 PA ?

    or separetly as FD <10K , and Rd is <10K

    pls confirm

    • Hi Sridhar,

      I think the banks are combining both FD & RD interest to calculate the threshold of Rs 10000. So the bank will deduct TDS if the total interest (FD & RD) is more than 10K

  164. i have one crore fd in bank, part of it is in my wife name. is that taxable ? i have submitted 15g/h forms and pan card. kindly help.

    • Any Interest earned on Bank FD is taxable and should be included in your Income tax return as “Income from Other Sources”.

      Also as the interest will be more than Rs 10000, TDS will be deducted by bank @10% (if PAN given) or 20% (if PAN not given).

  165. I am planning to invest 4lakhs on FD in my mom & dad name. Both are not even employed & dont have any other source of income. If i put 2 lakhs FD in my mom name & balance in my dad name for their medical emergency, TDS will be deducted?? please suggest.

  166. Hi Sir,

    My wife is housewife, She have FD for rupees 300000. She have to submit the form 15H/G to avoid tax on interest on FD or it is taxable.
    Please suggest…

    • If the FD interest is more than Rs 10000, bank will need to deduct TDS. However, you can file Form 15G/H to avoid TDS. make sure your PAN is updated in FD as well.

  167. Hy mr Vivek,

    I am Rehan

    I have NRI a/c, I made FD of 300k of my wide name but now bank is deducting TDS from my bank account so
    1)what should I do to get my TDS amount?
    2)how should I easily apply for tax return without any help of CA or other way .. I mean I want to do my self by on line how?
    3) apart from FD which other way is good for invest and avoide TDS issue.
    4) does I got any problem if I increase my New FD ?
    5) normally all FD i apply for my wife name only .. Will any problem accrue in future?

    Please guide me

  168. HELLO SIR,

    I have no source of income. I have some FDs of total amount of 3.5 lakhs for which I have submitted 15G for this financial year, but last year I did not file the 15G so the bank has deducted the tax on it. Do I need to file the return this year for my current FDs though I have submitted 15G form ??? or should the bank deduct tax directly on my fds??? Please guide.

    • You should file the return for the year for which Bank has deducted TDS. Assuming Bank has deducted TDs for FY 2014-2015, then you need to file return for AY 2015-2016 (FY 2014-2015) and claim the refund.

  169. sir,

    Myself and my husband are unemployed presently. we in 50’s

    Both worked for 15 years in private companies. our savings are around 30 lakhs, interest on this amt is our only source of income.

    We want to deposite the amt in post office small saving schemes.(like MIS and kvp or TD) or bank FD

    wheather will have any tax complications?


    • Hi Padma, You will need to consider the total income generated from these investments.

      If it is above the basic exemption limit, then the tax will be payable.

  170. sir,

    If i have a FD which returns an interest of rs 5000 pA and also a RD in the same bank and branch which returns an interest of Rs 6000 PA , a total interest is 11000, will TDS is applicable on these interests should i give 15 G (as my income is within the taxable income).

    1. will they calculate both and say >10000 limit ?
    2. will they calculate separetly ie <10000limit ?


  171. Hi
    I have 1 year FD’s in SBI. while opening the FD the bank said to submit 15 G form and said I don’t d have to submit the form again if I am unable to withdraw it on its maturity. Like wise the FD is on its 3rd year now from its opening in 2013. i haven’t submitted the 15 G during 2014 and 2015. Will my tax be deducted in this case for the year 2014 and 2015. Bank said that they would not deduct tax if it is submitted it at the beginning. Please advise me if bank gave me the correct information ? or if they have given wrong information what should I do to get the deducted tax.

  172. Hi there, my mother has no source of income. So if I create an FD of 20 lakhs in her name, it will be exempted from TDS after filing Form 15H/15G right? I mean, is it allowed for me to give her money and get an FD created in her bank account?

    Also, what happens when income in nil and and FD of 40 Lakhs is created? ( The twist being that an FD of 40 Lakhs will generate interest > 2.5 Lakhs , i.e., more than the minimum annual income for taxation.

    • Hi Jaya,

      Yes you can gift money to your mother and she can make FD in her name. But as the amount is large, it is better to keep a simple gift deed (preferably on stamp paper). Also make sure that this transfer is via cheque or bank transfer.

      Now, if she is more than 60 years, she can submit Form 15H to the bank and the condition is that the final tax on estimated total income should be NIL. So if the FD is 40 lakhs, i.e. interest approx 3.60 lakhs. Then if she is investing 60K in tax saving instrument, then there is no tax due. She can submit Form 15H and no TDS will be deducted.

  173. Hi Vivek,

    I have two FD’s in a same branch. having interests of 2.5K and 14K respectively. Recently one of the investment got matured of 2.5K interest but only 1.3K was credited into the bank account. I asked for the clarification, bank replied saying it has been deducted on account of TDS. I never got their explaination on how almost half of the interest got deducted. My CTC is above 5 LPA.

    – Is TDS is applicable across the various bank savings and FD’s at various branches.??
    – Does the banks calculate TDS on interests earned on tax saving FD’s (5 Years)?
    – Whether the TDS gets calculated separately for every FD or combined for the sum of annual interest in a branch/across branches or across banks??


    • Hi Swaroop,

      1) The bank will deduct TDS on total FD interest for the bank (all branches) is more than Rs 10000.
      2) Yes, Interest on Tax saver FD is also taxable and TDS is applicable.
      3) Now the TDS is calculated on combined amount.

      So you need to calculate the interest )paid/ accrued) for that year for all FDs with the bank and 10% of that will be TDS.

  174. Dear Sir,
    I am NRI and working in Saudi Arabia Since long time last 15 Years. My question is if, i make FD for 20,00,000/-Rs. (Ten Lacs Rs.) on my father and mother name in SBI bank for one year time period. I have to pay any TDS on the interest i earn. My father and mother both have no any other income in india. Both did not pay any income tax or no I.T. return file till now. As now my father is senior citizen category if, i make FD for 20,00,000/-Rs. I got appox. 1,80,000/-Rs. as an interest per year if, calculate 9%. kindly please suggest me that, can i make FD in one bank or some different bank let say 1. BOB 2. UNION BANK 3. SBI 4. DENA BANK can i split the amount as 5,00,000/-Rs. FDs in each bank. kindly waiting for your reply.

  175. Dear Sir,
    As i read here so many question & answers. My question is my father and mother’s income is not in a tax bracket. they will earn the amount of interest is only 1,80,000/-Rs. Approx. when we make FD in the bank at the same time if, we submit the form like as you said above form 15G/ 15H to avoid TDS on bank FDs. is it possible to do that, or the bank will cut the TDS amount and we later we have to make IT Return process to get back the same money. as we are not in the Tax bracket. kindly i am eagerly waiting for your reply to proceed the things. thanks for your advice in advance.

    • Hi Manish, Your parents can submit form 15g/h and once approved, the bank will not deduct TDS on the FD Interest amount.

  176. sir i deposited fd rupess l00000 that time i dont have pan. fd period is 2012 -2015 . i submited pan at 2015 . bank deduct fds for 2012 2013 2014. they give refund for only 2015 year only. my quedtion is any way to refund deducted amount .

  177. Recently My Bank SBI Deducted some amount from FD..On march1st 2016. i got less than principle amount. I shocked. My annual income below 2lac but i have fds around 1.8l in my bank.
    How can i gain that amount

  178. sir my FA 2016-17 Salary is Rs. 250000 and my interest income is rs. 200000 i have invested in 80 C rs. 150000 and miy income is less than rs. 500000 so i get 87A rebate Rs. 5000 can i submitted from 15G

  179. Sir,
    I am working in a psu bank and my salary is less than 2.5 lac. ie, around 2-2.2 lac approx annually. I have fd, rd accounts in my bank and I may earn interest from them more than 10k. Please clarify whether I can submit 15 g form in my bank in which I am working. As people saying that salaried employees can’t fill 15g.

    • Hi Anubha, Salaries employees can file Form 15G. Form 15G can be filed by any resident (non senior citizen) if following conditions are satisfied
      1) The final tax on his estimated total income should be NIL ; and
      2) The aggregate of the interest etc. received during the financial year should not exceed the basic exemption slab

      You can qualify under clause 1 above. So you can submit Form 15G and bank should not deduct TDS on your FD income.

  180. My income is 5.26 lakhs for 2015-16. I have earned 5026/- as a FD interest. I have file the return without showing FD interest. Now I want to revised my return and pay the tax on interest earned. How can I show in return file for the amount I have paid through challan

    • Hi Dharmesh, You can submit the revised return through Income tax india efiling website. Use the same form and select the “Revised Return” details in the form. There is a field in the form which says – Under which section return is filed – select 139(5)

  181. A client paid me professional fees of Rs.25,000 in Dec’13
    Then another instalment of Rs.25,000 in May’14 and
    Last instalment of Rs.40,000 in Nov’15.
    He deducted Rs.10,000 from the total amount of Rs.1,00,000 paid in above instalments.
    I was assessed for FY 13-14 and FY 14-15 and paid tax on the first two fee instalments after assessment in the respective years. Now, that the client has deducted total TDS from my fees and paid up the same, how do I claim refund from the TDS as I have already paid tax.

    • Hi Neha,If the client has deducted TDS now. Check in which year he has deposited the tds amount (from tds certificate)

      When you file the return fot he current year, you can claim full TDS amount. Any excess deduction, you can claim refund.

  182. Sir,
    I had opened two FDs in my two minor daughters name in 2011 of R’s.10 lacs each for 5 years. I had given my pan no. To bank. Later I made pan no. Of daughters in 2014 and submitted the same to bank. Along with form 15g. Now they have cut TDs @ R’s.80,000/- from each TDs @20% saying pan no. of minor’s rcvd late in 2014 and pan no. of guardian not applicable if minor’s pan no. rcvd. Is it correct? Pls reply soonest as amount cut is too much.
    Anita vaswani

    • Hi Anita, Which bank is this?

      1) Ideally the TDS should be deducted each year based on the Interest accrured in that year (not in the end of FD)

      2) If they are deducting TDS at the end , then they should take into account the PAN on record on the date of deduction.

  183. i am PSU employee TDS deducted 50000 and also tax deduct in my FD 12000 how return FD interest Tax and itis which section goes to ITR 1 form

    • Hi Dwarika,

      You need to show the TDS amount in the TDS Paid Section of ITR 1. If you are filing ITR 1 nonline, that should be automatially populated based on Income tax data against your PAN number.

  184. I have few queries
    1. if someone salar is 270000 per annum what amout of tax he have to pay at year end.
    2. How can i claim transport and mobile bill deduction from tax . transport will be hard to claim because i travel through auto rikhshaw. so no bill can be shown any idea?
    3. how to calculate tax in case if someone has salary 270000 per annum + has a profit of 35000 from Fixed deposit of one year . will this maturity income also adds upto total taxable ammount.

    kindly reply urgent on my email also

    • Hi Karan,

      1) What is the taxpayer age.
      The transport bill can only be deducted if the company is giving such allowance. the mobile bill – if the company is giving r-imbursement and not as your salary.

      2) When you say 35000 profit in 1 year, is that 35000 is Interest or the total maturity amount?

  185. if i made a fixed deposit for every 3 months . Like wise for 1st three months it is for rs 2.3 lacs and after getting interest rate with 6.25 percent i got some amount not exceeding rs 10000 , and by adding some more amount to this total nxt 3 months i made a fd of rs 2.8 lacs and so on the rest 3 months.
    My question is that if i am not getting the interest exceeding rs 10000 , will any tds or income tax will deduct or not.

    • Hi Rajat, the TDS will be deducted if the total FD Interest amount in 1 year is more than Rs 10000 (even if it is frm multiple FD at different times).
      TDS will be deducted from total FD interest when it reaches RS 10000.

  186. When TDS was deducted by bank @20% on FD without PAN card, and there is no any other income, how to get refund? pl let me know the ITR form to be filled, mode of filing i.e. mannual or on line e-filing website. As this TDS amount was not entered in 26 AS due to lack of PAN card, pl suggest the correct procedure for its refund.
    Thanking you

    • Hi Bajrang, The process is time consuming.

      You will have to first apply and get the PAN number.
      Then give this PAN to bank and ask them to update their TDS return.

      Once they do that, the TDS amount will be reflected in Form 26AS. You can then file return and claim refund.

  187. For how many years is it mandatory to preserve records of financial transactions for an individual tax payer after the filing the income tax returns.

  188. I am a post graduation student who is getting stipend, not salary. I have made a few fd in bank. And 10% is been deducted on interest ( PAN attached). Do I really need to pay tax now? Since I do not have any source of income. It is only stipend which I am getting to support my education.Thanks.

  189. hello sir,

    I am a home maker. i do not have any wealth. my father sold some property and gave me a cash of 20,00,000 (twenty lakhs) .I do not have any other sources of income. this amount is deposited as an FD for 10 years at 9.5% p.a.
    i get the interest every quarterly. this money I spend for my living, for my son’s education etc. It is the only source of income I have for my livelihood. Every year I give the 15g. Since 4 years i did not have any tds deduction, but this year 2016- the bank is deducting a tds @10% on the interest i am getting inspite of me submitting the 15g. From the total interest i receive i saved some amount and as of now i have 5,00,000…. which i have in the form of FD….so i.e. I have 3 FDs ……….

    1. 20,00,000……10years….9.5%
    2. 4,00,000…….3years…..9.05%
    3. 1,00,000…….3years…..9.05%

    Now my question is

    1. what should i do to avoid this tds.
    2. should i file my returns.
    3. how can i get back my deducted tds amounts.
    4. As this is the only source of income i have, in future how should i invest or avoid this tax slab.

    • Hi, Form 15G is valid only if the total interest received during the financial year does not exceed the basic exemption slab of Rs 2.5 lakhs.

      As your total interest is less than that amount, you should check with bank, why TDS is deducted.

      For which financial yea, bank has deducted TDS? How much is the interest & tax amount shown in TDS certificate.

  190. Hi vivek

    you have done a good job
    I have a query ‘on timing the FD’. does banks not deduct TDS at the accrual time?
    I mean if I have a FD for 5 years and on maturity if the interest become more than 10000, in this case bank will also deduct TDS.

    • Hi Raghav,

      As per the rule, the TDS is deducted based on per year interest on acrual basis. So if you have 5 year FD, then bank need to check the interest accrued for each year and deduct TDs if it is more than 10K in that year.

      But I have seen many public sector banks when they deduct TDS at the time of maturity if the interest over 5 years is more than 10K, but that’s not correct. You should raise this with branch manager.

  191. On the FD bank has deducted TDS but indicated wrong amount in Form26AS. Bank is unable to correct it. How do I take up with Income Tax Dept.,

    • You need to ask Bank to correct it. You can try modifying the TDS amount to correct value when filing the return. But as there will be mismatch, you might be contacted by Income Tax dept via a notice.

  192. I got intimation mail form Income Tax Department regard mismatched for Assessment Year 2017-18 between IT Filing and 26AS (FD interested not updated Rs. 1992). if I add 1992 in other source, my taxable income will be more than 5 lakhs since I did not get Tax Credit (Sec 87A) 5000. So I have to Pay around Rs. 6000. Please suggest how to avoid this situation. And also please let me know is any possible to pay now Charity donation for Last Assessment Year (80G/80GGA). Kindly advice.


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