How much TDS is deducted on ₹60,000 annual FD interest income?

Banks deduct 10% TDS on FD interest above ₹40,000 per financial year (₹50,000 for senior citizens). On ₹60,000 of annual FD interest, the bank deducts ₹6,000 and credits ₹54,000 to your account. The ₹6,000 shows up as TDS in your Form 26AS — adjustable against your overall tax liability at ITR filing.

If your total income falls below the basic exemption limit (₹4 lakh under new regime FY 2025-26, ₹3 lakh old regime), the entire TDS is refundable. Submit Form 15G (under 60) or Form 15H (senior citizen) to the bank at the start of each financial year to prevent TDS deduction in the first place — but only if your total annual income is genuinely below the exemption threshold.

Three optimisations: (a) split FDs across multiple banks to stay below the ₹40,000 threshold per bank if income is otherwise low; (b) prefer tax-efficient alternatives like debt mutual funds, where indexation benefits used to apply (now removed for new investments post-April 2023 but holdings still benefit); (c) senior citizens get an additional ₹50,000 exemption under Section 80TTB for interest from FDs and savings accounts.