is fixed deposit interest taxable in india for senior citizens?
Yes, interest earned on Fixed Deposits (FDs) is taxable in India, even for senior citizens. But the government gives some special tax benefits and higher exemptions to senior citizens compared to others. Let me break it down step by step:
Tax Deduction for Senior Citizens (Section 80TTB)
Senior citizens (60 years or older) can claim a deduction of up to ₹50,000 in a year on interest earned.
Example:
If you earn ₹45,000 interest in a year, it’s fully exempt (no tax).
If you earn ₹70,000, then ₹50,000 is exempt, and only ₹20,000 is taxable.
TDS (Tax Deducted at Source) on FD Interest
Banks usually deduct TDS @ 10% if your interest income from FDs in a year crosses ₹40,000 (₹50,000 for senior citizens).
If your total income is below the taxable limit, you can submit Form 15H to the bank so that they don’t deduct TDS.