What is TDS?
Tax Deducted at Source
TDS is income tax deducted upfront by the payer — a bank, employer, or company — before the money reaches you, and deposited directly with the government on your behalf. It is an advance collection of tax, not an extra tax.
On bank FD interest, TDS applies at 10% (with PAN) or 20% (without PAN) once your annual interest from that bank exceeds ₹40,000 (₹50,000 for senior citizens). If your total taxable income is below the taxable limit, you can submit Form 15G (or Form 15H for senior citizens) to prevent TDS deduction altogether.
TDS deducted is not a final tax — it is adjusted against your actual tax liability when you file your Income Tax Return, and any excess is refunded.
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