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TDS deduction applies when the total interest paid/accrued exceeds the threshold limit of Rs. 50,000/- for residents and Rs. 1,00,000/- for senior citizens in a financial year (FY).

For resident individuals and corporates holding time deposits, TDS deduction happens during interest payment/credit/reinvestment/accrual which ever is early during the FY. However, for NRO customers, the entire interest earned (both Fixed Deposits and Savings Accounts) is taxable without any threshold limit, as mentioned above.

As per CBDT CIRCULAR NO- 03/2010 dated 2nd March, 2010, tax shall be deducted at source on accrual of interest at the end of the year whenever the aggregate of amounts of interest income credited or paid or likely to be credited or paid during the financial year by the banks exceeds the limits specified in point 1 above.

TDS is deductible on the entire interest when the interest paid/credited/accrued exceeds the threshold limit of Rs 4,00,000 for individuals other than senior citizens and Rs 12,00,000 in the case of senior citizens for Form 121 during the Financial Year

Higher tax deduction at a penal rate of 20% is applicable in the following scenarios for interest paid or credited:

• When the Bank does not receive PAN information from the individual.
• The provided PAN is inoperative.
• When PAN is not linked with Aadhaar

  The bank generates the interest certificate with the updated communication address according to their records, while Form 131 is generated by the CPC of the Income Tax Department and reflects the address provided by you in your IT records. If the address on the TDS certificate is not current one, please update your current address in your Income Tax PAN records.

To avail of the DTAA benefit on an NRO Account, NRIs must submit the following documents through Net banking or at an HDFC Bank branch.
 

• Valid Tax Residency Certificate (TRC) at the beginning of the financial year 
• DTAA Annexure in the bank's format (Please refer to the annexure)
• Form 41 as required by the law (Please refer to page 3 of the annexure for generating Form 41 digitally).

The disparity between the interest and TDS certificates occurs because multiple Customer IDs may be associated with a single PAN. To avoid this, it is necessary to aggregate the interest and tax amounts from all the Customer IDs.

Maturity process along with tax deduction explained below :

The Income-tax Act,2025 has amended the existing provision of section 194N of the Income-tax Act,1961 with effective from 1^st April 2026 is now reclassified to section 393(3) of the Income tax Act 2025.
 

As per section 393(3) of the Income-tax Act, 2025 TDS has to be deducted if the sum or the aggregate sums withdrawn in cash as follows:
 

TDS at the rate of 2% on aggregate cash withdrawals in excess of ₹1 crore for customers other than registered co-op societies.
 

TDS at the rate of 2% on aggregate cash withdrawals in excess of ₹3 crore for registered co-op societies
 

According to section 393(3), non-filing of income-tax returns for TDS applicability check is no more required.
 

In the absence of a valid and operative PAN, the TDS rate will be 20%.
 

Customers eligible for exemption from TDS on cash withdrawal can submit a declaration to the nearest branch every year

• For pay-out type deposits, the bank deducts TDS from the current/savings account where the interest is credited.
• To avail TDS deduction for reinvestment deposits, customers can link or delink Current/Savings A/c by submitting a request to the nearest branch.

The bank updates the PAN under the customer record when the NSDL PAN Name matches the customer name as per the Bank records. However, in cases of name mismatch, the bank does not process PAN updation.

To download the interest certificate, you can either use Net Banking by following one of the paths mentioned below or go to your nearest branch.

• Login to NetBanking
• ·Click on the Accounts tab
• Select Request
• Download the Interest Certificate
  
  Or

• · Login to NetBanking
• · Save ---> Accounts
• · Under Actions, Click on 'Download Interest Certificate' to download the Interest certificate for the current and previous year.

The difference in TDS for monthly or quarterly interest payments can occur, as demonstrated in the example below. The difference in TDS for monthly or quarterly interest payments arises when the threshold limit is not exceeded for the first two interest payments, resulting in non-tax deductions. However, if the threshold limit is exceeded in the third interest payment, the entire interest amount paid/credited during the said financial year becomes eligible for a tax deduction.

• The bank issues TDS certificates quarterly according to Income Tax rules in the prescribed format.

• The bank sends the TDS certificates to the registered email address mentioned in their bank records.

• If the email address is not registered or the email bounces, the bank sends physical copies of the TDS certificates to the mailing address.

• Customers can access TDS certificates through Net banking as well.

• Customers can visit the nearest branch and obtain a physical copy of the TDS certificate.

The recovery of TDS takes place from the interest earned on respective fixed deposits (FDs) or from the linked current account/savings account. In cases where deposits have earned interest but TDS was not initially deducted when the interest was paid/compounded as not breaching the threshold limit (refer to point 1 above), the TDS for those FDs will be deducted from the interest earned on other deposits (under same PAN) if cumulative interest amount will exceeds the threshold limit. To prevent the recovery of TDS from other deposits, customers can link their savings or current accounts for TDS recovery.

 To reconcile the interest and TDS amounts, please refer to the Annexure to Form 131 (Interest Certificates available for download from Net Banking or through the nearest Branch). These certificates are issued on a quarterly basis. By comparing the interest mentioned in the Interest Certificate with the interest reflected in Form 131 (TDS Certificate) / 168, you can easily match the amounts.

Failure to link your PAN with Aadhaar, in the prescribed form and manner,will result in the PAN becoming inoperative. A higher rate of TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) will be applicable in such cases.
 

Additionally, starting from 1^st April 2026, Form 121 will not be accepted for inoperative PAN, and any existing Form 121 received before 1^st April 2026 will be considered invalid until the PAN becomes operative again.

The following types of income are covered for the purpose of Form No. 121: PF withdrawals and Pension, Insurance Commission, Rent, Interest on deposits, Income from Mutual Funds, Payments in respect of Life Insurance Policy, Dividend etc.

To open a Fixed Deposit account, you typically need to provide identification documents such as a PAN card, Aadhaar card, passport, driver's licence, and proof of address. 

A Fixed Deposit (FD) is a financial instrument where you deposit a lump sum of money with a bank for a fixed period at a predetermined interest rate.

The minimum deposit amount is ₹5,000. There is no specific maximum limit for most FDs. 

It is a declaration by a taxpayer to the effect that tax on his estimated total income for Tax year will be NIL, with a view to avoid deduction of tax at source. It is required to be submitted to the concerned payer. Based on such declaration, the payer will not deduct tax on income or credit due to the taxpayer.

TDS will be deducted if interest payable/reinvested on RD and FD exceeds ₹50,000, ₹1,00,000 for senior citizens, in a financial year. There are certain tax benefits available on selected FDs such as the Five Year Tax Saving Fixed Deposit.

Yes, the new Form No. 121 has replaced the earlier Forms 15G & 15H. Now, both type of taxpayers i.e. tax payers below the age of 60 as well as taxpayers of the age of 60 and above, will use Form No. 121 for submitting declaration in order to avoid relevant income from being subjected to TDS.

Investing in bank Fixed Deposits offers assured returns and capital protection with minimal risk. It provides a stable and predictable way to grow your savings. FDs offer flexible tenure options and competitive interest rates.

You can add a nominee when opening the FD account or update it later through NetBanking, visiting a branch or contacting customer service.

The Sweep-in facility links your savings or current account with the FD. It enables the automatic transfer of funds from FD to the account when the balance falls below a certain threshold.

No. It is meant to be used only by those taxpayers who do not want tax to be deducted at source, subject to meeting certain conditions as their estimated total income for Tax Year is likely to be NIL. Declaration in Form No. 121 needs to be filed for every Tax Year separately, as required.

Investing in an FD may be relatively safe because the returns are assured and known at the time of booking. Additionally, bank deposits are insured up to ₹5 lakh by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

Resident Individuals both below 60 years and 60 years or above, HUFs, and other specified entities meeting stipulated criteria. Companies and Firms are not eligible to file Form No. 121. Non-residents are not eligible to file this form.

You can withdraw your FD before maturity. However, a premature withdrawal penalty may apply. Please contact your RM in case you need to make premature withdrawals.

Yes, declaration needs to be submitted by the declarant in Part A of Form No. 121 to each payer responsible for paying income or sum.

You can open multiple FDs with HDFC Bank, as there is no limitation on the maximum number of FDs you can open.

Yes, quoting of PAN is a mandatory requirement for submission of declaration in Part A of Form No. 121 by the declarant. In the absence of PAN, the declaration is invalid and the payor is required to deduct TDS at the applicable rate as per Income-tax Act, 2025.

HDFC Bank offers loans against your FD. You can borrow up to 90% of the deposit amount without breaking the FD.

The declarant must furnish the declaration in Form No. 121 to the payer before the scheduled transaction date.

Interest can be received monthly, quarterly or at maturity, based on your preference.

Submission of declaration by the declarant to the payer can be made in paper form, or online if any such facility is provided by the payer.

The copy of declaration(s) by the payer shall be furnished electronically on the e-filing portal of the Income-tax Department.

Yes. The payer is required to report the details of such transactions in the quarterly TDS statement in Form No. 140.

Yes. The declarant is required to submit the declaration with each payer.