Is TDS Refundable on Fixed Deposits (FD)?
Is TDS Refundable on Fixed Deposits (FD)?
Your Complete Guide for FY 2024–25 | AY 2025–26
If you’ve earned interest from a Fixed Deposit (FD), you might have noticed that the bank deducts TDS (Tax Deducted at Source) on your interest, even if your income is below the taxable limit.
So the common question is:
“Is TDS on FD refundable?”
✅ Yes, TDS deducted on FD interest is refundable if your total income is below the taxable limit or your actual tax liability is less than the TDS deducted.
Let’s understand when and how to claim your refund.
📘 Why Is TDS Deducted on FDs?
Under Section 194A of the Income Tax Act, banks are required to deduct TDS @ 10% on FD interest if:
• Your total FD interest in a financial year exceeds ₹40,000 (₹50,000 for senior citizens)
• PAN is submitted
• If PAN is not submitted, TDS is deducted at 20%
📌 This deduction happens even if your total annual income is not taxable unless you submit Form 15G/15H in advance.
✅ When Is TDS on FD Refundable?
You’re eligible for a TDS refund if:
| Situation | Refund Eligibility |
| Total income is below the basic exemption limit | ✅ Yes |
| TDS deducted despite submitting 15G/15H late | ✅ Yes |
| Declared wrong income initially, filed revised ITR | ✅ Yes |
| DS deducted at 20% due to missing PAN | ✅ Yes (if eligible) |
| You forgot to claim deductions (80C, 80D, etc.) | ✅ Yes |
🧾 Example:
• FD interest earned = ₹55,000
• Bank deducted TDS @10% = ₹5,500
• Total income (after deductions) = ₹2,80,000
• Basic exemption limit (for age <60) = ₹2,50,000
• Final tax liability = ₹0
✅ You can claim the full ₹5,500 refund by filing your ITR.
🔁 How to Claim TDS Refund on FD?
1. Check TDS entries in Form 26AS and AIS
2. File your Income Tax Return (ITR-1 or ITR-2)
3. Report total interest income from all FDs
4. Mention all deductions (80C, 80D, etc.)
5. Declare TDS amount as per 26AS
6. E-verify your ITR and ensure your bank account is pre-validated
7. Refund will be credited within 7–45 days
🛡️ How to Avoid TDS Deduction Next Time?
• Submit Form 15G (for age <60) or 15H (for senior citizens) to your bank at the beginning of the financial year
• This self-declaration states that your income is below the taxable limit
🔍 Where to Check If TDS Is Deducted?
| Document | Where to Find |
| Form 26AS | https://www.incometax.gov.in |
| AIS | Annual Information Statement (same portal) |
| Form 16A | Issued by the bank (quarterly) |
Final Words
Yes, TDS deducted on Fixed Deposit interest is fully refundable, provided your actual tax liability is less than the tax already deducted. All you need to do is file your ITR on time and match it with your Form 26AS.
