Budget 2025 hikes TDS limit for bank FD

The Union Budget 2025 proposes to increase the limit for tax deduction at source (TDS) on fixed deposit (FD) interest for general citizens (non-senior). This will take up the limit from the current ₹40,000 to ₹50,000 per financial year and will come into effect from April 1, 2025. Banks are required to deduct tax at source when interest paid to account holders goes over the specified threshold in one financial year. At the moment, it is 10% if PAN is available.

There are certain guidelines issued by the Income Tax Department that must be abided by when it comes to the deducting TDS on Fixed Deposit interest. According to the HDFC Life website.