FD Interest Is Taxable: Are You Filing It Right?
Many Indians think FD interest is safe money — but it is fully taxable. If you don't report it correctly in your ITR, you could face a tax notice or miss a refund you deserve.
That ₹1L FD earns ~₹7,000/year — but Uncle Tax may take ₹2,100 of it silently via TDS
Your FD interest can be taxed before you even see it
Key Takeaways
Download your Form 26AS and AIS from the Income Tax portal to see exactly how much TDS has already been deducted on your FD interest.
Report your total FD interest under 'Income from Other Sources' in your ITR — not just the amount after TDS, but the full interest earned.
If your total income is below the taxable limit, submit Form 15G (or 15H for seniors) to your bank now to stop unnecessary TDS deductions.
Many Indians think FD interest is safe money — but it is fully taxable. If you don't report it correctly in your ITR, you could face a tax notice or miss a refund you deserve.
Here's what happened: FD interest income is fully taxable every year — even if the bank hasn't paid it out yet and it's still accumulating.. Banks deduct TDS at 10% if your FD interest exceeds ₹40,000 per year (₹50,000 for senior citizens) from one bank.. Under the new tax regime, no deduction on FD interest is available; under the old regime, senior citizens can claim up to ₹50,000 under Section 80TTB..
What you should do: Download your Form 26AS and AIS from the Income Tax portal to see exactly how much TDS has already been deducted on your FD interest.. Report your total FD interest under 'Income from Other Sources' in your ITR — not just the amount after TDS, but the full interest earned.. If your total income is below the taxable limit, submit Form 15G (or 15H for seniors) to your bank now to stop unnecessary TDS deductions..
Even if your FD is in someone else's name (spouse or parent), if you funded it, the interest is taxable in YOUR hands — this is called the 'clubbing of income' rule and most people miss it.
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- [1]“ITR filing 2026: FD interest is taxable — here's how to report it correctly” mint - money · 18 Jul 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.