Interest that is earned on fixed deposits is taxable in the hands of the depositor as per the income slab so a person who earns income between 2 lakh to 5 lakh pays only 10% tax on it while person who earns above 10 lakh pays 30% tax (And education cess and surcharge at the rate of 3%)
If the aggregate interest income from fixed deposits that you are likely to earn for all your deposits held in a branch is greater than Rs 10,000 in a financial year, you become liable for TDS . From 1 June 2015 TDS will be levied if the combined interest income from FDs in all branches of a bank exceeds Rs 10,000 in a year.
If PAN is not submitted TDS is deducted at the rate of 20%.
TDS is also deducted on interest earned or accrued ,but not yet paid, at the end of the financial year. If you have gone for cumulative option in FD which pays interest at maturity still interest would be earned every year and TDS if applicable would be deducted though you DID NOT get the money.
A consolidated TDS Certificate in Form 16A, for TDS deducted during a financial year will be issued in the month of April of the following financial year.
TDS deducted comes up in your Form 26AS which tied to your PAN number. Details in it should match the Form 16A provided by bank to you.
