FD tax calculator: tax on your fixed deposit interest

Interest from a fixed deposit is not tax-free. It is added to your total income for the year and taxed at your slab rate. Enter your interest income and your tax slab, and this calculator estimates the tax payable and the interest you keep after tax.

Banks may also deduct TDS from your interest once it crosses a limit in the Income Tax Act, and that limit has been revised more than once, so check the current figure. TDS is an advance payment of your tax, not an extra charge: you claim it against your final liability. If your total income is below the taxable limit, you can ask the bank not to deduct it by submitting the relevant declaration form.

Frequently asked questions

Is FD interest taxed every year or only at maturity?

Tax is due on interest as it accrues each year, even on a cumulative FD that pays out only at maturity. Banks usually report and deduct TDS yearly.

Can I avoid TDS on my FD interest?

If your total income is below the taxable limit, you can submit Form 15G, or Form 15H for senior citizens, so the bank does not deduct TDS. You still declare the interest in your return.

Which FDs save tax?

Tax-saver FDs with a five-year lock-in can qualify for a deduction under Section 80C under the old tax regime, subject to the overall limit. Their interest is still taxable.

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