How to Avoid TDS on Fixed Deposits
Fixed Deposits (FDs) are a favorite among Indian investors for their safety and assured returns. But there’s a catch — TDS (Tax Deducted at Source) eats into your interest income if it crosses ₹40,000 in a year (₹50,000 for senior citizens).
Worried about TDS on your FD interest? Let’s explore legal ways to avoid TDS on Fixed Deposits, so you can maximize your returns smartly and safely.
1️⃣ Submit Form 15G / 15H to Your Bank
If your total income is below the taxable limit, you can avoid TDS deduction by submitting:
- Form 15G (for individuals below 60 years)
- Form 15H (for senior citizens)
👉 These forms declare that your income is not taxable, so no TDS should be deducted.
🔗 How to Download & Submit Form 15G/15H (BankBazaar)
2️⃣ Open FDs in the Name of Non-Taxable Family Members
You can invest in your spouse’s or parents’ name (if their income is below taxable limit) and ensure the interest earned is within the non-taxable slab.
✅ Pro Tip: Ensure proper income clubbing rules are followed. You can learn about this from experts on Invest Snow.
3️⃣ Split Fixed Deposits Across Banks
Banks deduct TDS only if interest from that bank exceeds ₹40,000 (₹50,000 for senior citizens) annually. You can split your deposits across multiple banks to keep the interest below the threshold in each.
4️⃣ Choose Cumulative FDs with Long Tenure
In a cumulative FD, interest is compounded but paid at maturity — so TDS applies only in the year of maturity. This defers your tax liability legally.
5️⃣ Opt for Tax-Free Investment Alternatives
Consider diversifying into instruments like:
- Senior Citizen Savings Scheme (SCSS)
- Tax-Free Bonds
- Public Provident Fund (PPF)
These are exempt from TDS and may offer better tax-adjusted returns.
6️⃣ Use a Joint Account with Strategic Planning
Joint Fixed Deposits with family members can help you split interest income and possibly stay below the TDS limit individually. But taxation will depend on the first holder’s PAN.
7️⃣ Invest via Corporate FDs Offering Higher Post-Tax Returns
Some reputed companies offer Corporate FDs with better rates. However, check credit ratings before investing.
👉 Recommended: Apply for loans or check financial products at Gromo Loan Offers for better financial planning.
FAQs – Fixed Deposit TDS से कैसे बचें?
Q1: क्या FD पर TDS से पूरी तरह बचा जा सकता है?
✔️ हां, अगर आप सही तरीके जैसे 15G/15H जमा करते हैं या निवेश को सही तरीके से प्लान करते हैं, तो आप TDS से बच सकते हैं।
Q2: अगर TDS कट गया तो क्या वापस मिल सकता है?
✔️ हां, Income Tax Return (ITR) में क्लेम कर सकते हैं।
Q3: FD को छोटे-छोटे अमाउंट में करने से फायदा होता है?
✔️ हां, इससे आप बैंक-वार लिमिट से नीचे रह सकते हैं और TDS से बच सकते हैं।
Conclusion
Avoiding TDS on Fixed Deposits isn’t about dodging taxes — it’s about smart, legal tax planning. If your income is within limits or you plan your investments wisely, you can maximize your FD returns without unnecessary deductions.
For more tax-saving tips and investment insights, check out our articles at Invest Snow.
Recommended Read:
👉 How to Invest in Mutual Funds with ₹500 Only
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