What is the logic of TDS deduction on FDs?

Fixed Deposits (FDs)
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What is the logic of TDS deduction on FDs?

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TDS stands for Tax Deducted at Source.

If the interest earned through FDs booked with a particular bank for an individual customer in a given financial year (April-March) exceeds ₹40,000 (₹50,000 for senior citizens), the bank deducts 10% TDS on the interest amount.

Important points to note:

This limit applies at both the bank and PAN level (this includes all FDs booked with the bank, whether online or offline).
Only interest accrued within the financial year (April-March) is considered.
For NBFCs, the limit is ₹5,000.