FD Interest is taxable at your slab rate along with applicable surcharge/cess. For example, if you have a total income of Rs 10 lakh per annum, you will be in the 30% tax slab. Let’s say your FD interest is Rs 1 lakh. It will face a tax of Rs 31,200 (tax rate of 30% and 0.4% cess). The TDS on fixed deposit (FDs) is 10% if the interest amount for the entire financial year exceeds Rs 10,000 for AY 2023-24. In the interim budget 2019, this TDS deduction limit on FD has been increased to Rs. 40,000 annually which is applicable in AY 2023-24. Under existing Income Tax rules, the TDS rate on fixed deposit interest is 20% if you do not provide your PAN Card to the bank.
Interest Paid or Payable By | Threshold Limit | Nature of Interest | |
Payee is a Senior citizen | Payee is any Other Person | ||
Co-operative engaged in business | 50,000 | 40,000 | Interest on time deposits |
Co-operative engaged in the banking business | 50,000 | 40,000 | Any other interest |
Primary Agricultural Credit Society | 50,000 | 40,000 | Any interest |
Co-op. Land Mortgage Bank | 50,000 | 40,000 | Any interest |
Co-op. Land Development Bank | 50,000 | 40,000 | Any interest |