FD Interest & TDS: Save ₹5,000+ With Form 15G
When your Fixed Deposit earns interest above a certain limit, your bank automatically cuts a tax called TDS before paying you. Many Indians lose money unnecessarily because they don't know the rules or forget to submit a simple form. Here's exactly who pays TDS, how much gets deducted, and how to legally avoid it.
A typical Indian family parks around ₹2–3 lakh in FDs as emergency savings — at 7% interest, that earns roughly ₹14,000–₹21,000 a year, putting many just above the TDS threshold. That's like losing 2–3 months of chai-and-snacks budget to a tax you may not even owe!
By submitting Form 15G or 15H on time, you can prevent your bank from deducting up to ₹5,000 or more in TDS — money that stays in your pocket instead of waiting months for a refund.
Key Takeaways
Submit Form 15G (below 60 years) or Form 15H (senior citizens) to your bank at the START of every financial year — this stops TDS deduction if your total income is below the taxable limit.
Check your Form 26AS or AIS on the Income Tax portal every quarter to confirm how much TDS your bank has already deducted — claim it back when you file your ITR.
If you have FDs across multiple banks, track total FD interest across ALL accounts — TDS applies per bank, but your total tax liability is calculated on combined income, so plan accordingly.
Fixed Deposits are one of India's most beloved savings tools — safe, predictable, and available at every bank. But millions of FD holders get a rude surprise when they see their interest credited: the actual amount is lower than expected. The reason? TDS, or Tax Deducted at Source.
Here's how it works. Under the Income Tax Act, if the interest you earn on FDs at a single bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens aged 60 and above), the bank is required to deduct TDS at 10% before crediting the interest to your account. If you haven't submitted your PAN to the bank, that rate jumps to 20%. The ₹40,000/₹50,000 limit applies per bank — so if you have FDs in three banks, each bank checks only its own interest payments.
The good news: you can avoid TDS legally if your total annual income falls below the basic exemption limit. Simply submit Form 15G (for individuals below 60) or Form 15H (for senior citizens) to your bank at the beginning of each financial year — April is the right time. These forms declare that your income is below the taxable threshold and instruct the bank not to deduct TDS. Remember to renew these forms every year; a one-time submission doesn't carry forward.
If TDS has already been deducted, don't panic. The amount shows up in your Form 26AS and AIS on the Income Tax portal. You can claim it back as a refund when you file your ITR — but that means waiting months for money that was rightfully yours. Prevention is far smarter than a refund.
Use GoCredit to compare FD rates across banks and plan your deposits smartly. Pro tip: spreading large FD amounts across family members (spouse, parents) helps keep per-person interest income below the TDS threshold — a simple, legal way to maximise your take-home returns.
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