Interest Earned on Tax Saving FD

The actual interest earned on Tax Saving FD is much higher than normal FD. You can simply understand this fact with the help of following example of investing Rs 10,000 in a tax saving fixed deposit offering 5% to 6% interest rate per year by three investors having tax slabs of 10%, 20% and 30%.

Taxability of Interest Earned on Tax Saver FD

Interest earned on the tax saver fixed deposits is fully taxable. Total interest earned shall be taxed as per the tax slabs of the investors between 5% and 30%. Banks deduct TDS at 10% when the interest earned is above Rs 40,000, prior to Budget 2019, the limit of TDS on interest income was Rs. 10,000. When the depositor does not provide the PAN details, TDS is deducted by the bank at 20% rate.

For senior citizens, the limit of exemption of interest income is increased from Rs 10,000 to Rs 50,000 in the Budget 2019 on deposits with banks and post offices. No TDS will be deducted for senior citizens, unless it crosses the new limit of Rs 50,000 in a financial year under section 80TTB of the Income Tax Act.

This interest income should be shown under the head "Income from Other Sources" while filing your Income Tax Returns.

Bank Tax Saving Fixed Deposit Scheme

Allahabad BankAllahabad Up Gramin Bank
Andhra BankAndhra Pradesh Grameena Vikas Bank
Andhra Pragathi Grameena BankArunachal Pradesh Rural Bank
Assam Gramin Vikash BankAxis Bank
Bandhan BankBangiya Gramin Vikash Bank
Bank Of BarodaBank Of India
Bank Of MaharashtraBaroda Gujarat Gramin Bank
Baroda Rajasthan Kshetriya Gramin BankBaroda Up Gramin Bank
Bihar Gramin BankCanara Bank
Catholic Syrian BankCentral Bank Of India
Central Madhya Pradesh Gramin BankChaitanya Godavari Grameena Bank
Chhattisgarh Rajya Gramin BankCity Union Bank
Corporation BankDcb Bank
Dena BankDena Gujarat Gramin Bank
Dhanalakshmi BankEllaquai Dehati Bank
Federal BankGramin Bank Of Aryavart
Hdfc BankHimachal Pradesh Gramin Bank
Icici BankIdbi Bank
Idfc BankIndian Bank
Indian Overseas BankIndusind Bank
Jammu And Kashmir BankJammu And Kashmir Grameen Bank
Jharkhand Gramin BankKarnataka Bank
Karnataka Vikas Grameena BankKarur Vysya Bank
Kashi Gomti Samyut Gramin BankKaveri Grameena Bank
Kerala Gramin BankKotak Mahindra Bank
Langpi Dehangi Rural BankLaxmi Vilas Bank
Madhya Bihar Gramin BankMadhyanchal Gramin Bank
Maharashtra Gramin BankMalwa Gramin Bank
Manipur Rural BankMeghalaya Rural Bank
Mizoram Rural BankNagaland Rural Bank
Narmada Jhabua Gramin BankOdisha Gramya Bank
Oriental Bank Of CommercePallavan Grama Bank
Pandyan Grama BankPaschim Banga Gramin Bank
Pragathi Krishna Gramin BankPrathama Bank
Puduvai Bharathiar Grama BankPunjab And Sind Bank
Punjab Gramin BankPunjab National Bank
Purvanchal Gramin BankRajasthan Marudhara Gramin Bank
Saptagiri Grameena BankSarva Haryana Gramin Bank
Sarva Up Gramin BankSaurashtra Gramin Bank
South Indian BankState Bank Of India
Sutlej Kshetriya Gramin BankSyndicate Bank
Tamilnad Mercantile BankTelangana Grameena Bank
The Nainital BankTripura Gramin Bank
Uco BankUnion Bank Of India
United Bank Of IndiaUtkal Grameen Bank
Uttar Banga Kshetriya Gramin BankUttar Bihar Gramin Bank
Uttarakhand Gramin BankVananchal Gramin Bank
Vidharbha Konkan Gramin BankVijaya Bank
Yes Bank 
Disclaimer: The Saving Fixed Deposit Interest Rates keep on changing. You are advised to check the interest rates with banks before making your FD.      Source: Bank Websites