TDS on interest received from bank FD: There is many discussion about the exemption on interest received by senior citizens from bank FDs. Finance Minister Nirmala Sitharaman has also made the youth happy in the 2025-26 budget. He has increased the TDS limit on interest on FD in the bank. Earlier, TDS was not deducted on earnings up to Rs 40 thousand through interest from bank FDs. Now it has been increased to 50 thousand. That is, now banks will not automatically deduct TDS on earnings of less than 50 thousand.
Banks will inform the income tax department by deducting the TDS if the interest of the FD is more than 50 thousand. If the bank has a PAN card number, 10 per cent TDS is deducted. If the bank does not have a PAN card, 20 per cent TDS is deducted on the taxable income of the FD interest. Everyone below the age of 60 years will get the benefit.
It will be implemented from April 2025.
The TDS limit increased by the Government of India for people below the age of 60 years on earnings from bank FDs will be implemented from April 1. The limit of exemption given to senior citizens on TDS in bank FD is different from these. These are also declared separately by banks from time to time.
Initiatives to give more cash in the hands of the people
Other provisions of the budget and the increase in the TDS limit on bank FDs have also made it clear that the government wants to reduce the tax deduction from the middle class and put more and more cash in the hands of the people. Its purpose is to increase consumption.