FD Interest Rate: The TDS limit on interest for senior citizens has been doubled from the current Rs 50,000 to Rs 1 lakh. This means that if your interest amount in a bank FD is less than Rs 1 lakh, the concerned bank will not deduct any TDS.
FD Interest Rate: Despite the significant drop in the repo rate, there are still many banks offering high interest rates of up to 8.25% on fixed deposits (FDs). These rates are for a period of one year for senior citizens. Senior citizens who have idle money can earn good returns from this FD in a short period. Also, from April 1, 2025, senior citizens can enjoy a higher limit of TDS deduction on FD interest. The following banks are offering good interest rates on one-year FDs:
Interest rate up to 8.25%
Bandhan Bank is offering interest rates up to 8.25% on one year FDs for senior citizens.
Interest rate up to 8%
IndusInd Bank is offering interest rates up to 8% on one year FDs for senior citizens.
Interest rate up to 8%
RBL Bank is offering interest rates up to 8% on one year term FDs for senior citizens.
Interest rate up to 7.75%
Tamilnad Mercantile Bank is offering interest rates up to 7.75% on one year tenure FDs for senior citizens.
You will get the benefit of higher TDS limit
While presenting Budget 2025, the Finance Minister had said that TDS rates will be rationalised, which will provide a big relief to taxpayers. The limit of tax deduction at source (TDS) on interest for senior citizens has been doubled from the current Rs 50,000 to Rs 1 lakh. This means that if your interest amount in a bank FD is less than Rs 1 lakh, then the concerned bank will not deduct any TDS. Also, even if the interest amount is more than Rs 1 lakh, but your total income after all deductions is less than Rs 12 lakh, then you can submit Form 15H. By doing this, the bank will not deduct TDS even if the interest exceeds Rs 1 lakh for the financial year 2025-26 (assessment year 2026-27).
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