For a ₹10 lakh (1 million) Fixed Deposit, the TDS (Tax Deducted at Source) is generally 10% on the interest earned if it exceeds ₹40,000–₹50,000 per year. Assuming a 7% interest rate, the yearly interest is ₹70,000, resulting in a TDS of ₹7,000 ( 70 , 000 × 10 % 7 0 , 0 0 0 × 1 0 % ). If PAN is not provided, the tax deduction is 20%.
Yes, FD interest is taxable, but if your total income, including the interest, is below the basic exemption limit, you are not required to pay income tax. However, banks may still deduct TDS on FD interest if the annual interest exceeds ₹ 50,000 (₹ 1,00,000 for senior citizens).
If you deposit more than ₹10 lakhs in cash in your savings account in a year, it gets reported to the Income Tax Department. You'll need to provide your PAN for such deposits. Too many large cash deposits might lead to a tax notice. Banks are required to inform the government about these big transactions.
Yes, you can deposit Rs. 20 lakh across one or multiple FDs. But only Rs. 5 lakh per bank per depositor is insured by DICGC.
Options Available to Invest 10 Lakh Rupees
To earn Rs. 50,000 per month from an FD, you need to consider the interest rate offered. For example, at an 8% annual interest rate, you'd need an FD of around Rs. 75 lakhs.
Maximum marginal rate is the highest rate of tax at any income level. This means for those with incomes between Rs 2 crore and Rs 5 crore, 39% will be the highest applicable tax rate, and for those with incomes above Rs 5 crore, it will be 42.74% — the highest tax rate since 1992.
In India, the 30% income tax rate generally applies to individuals earning above ₹24 Lakhs (under the old regime/default for some) or ₹15 Lakhs (under the new optional regime for FY 2025-26) and to firms (as a flat rate), while certain income types like lottery winnings, online gaming, and virtual digital assets (like crypto) are taxed at a flat 30% for everyone, regardless of total income.
A Tax Saving FD lets you avail Income Tax exemption under Section 80C of the Income Tax Act, 1961. The Fixed Deposit Income Tax exemption can be claimed on investments of up to ₹ 1.5 lakh. The lock-in period is five years.
Taxation on NRI fixed deposits
NRE fixed deposit is exempt from income tax. NRO fixed deposit is taxable in India as per the tax slab rate of your opted regime. There will be an upfront tax deduction (Tax Deducted at Source (TDS)) at the maximum rate of 30% plus applicable surcharge and cess.
To avoid TDS deduction on your FD interest, you can submit Form 15G (if you're below 60 years old) or Form 15H (if you're a senior citizen) to your bank. These forms certify that your total income is below the taxable limit, and therefore, no TDS needs to be deducted.
When considering investing ₹10 lakhs in a fixed deposit, there are a few factors to evaluate: Returns: The returns on FDs on ₹10 lakhs may range from 4% to 8% or more, depending on the financial institution and tenure opted for. This would mean an interest income of ₹50,000 to ₹70,000 per annum.
The FD vs stocks comparison highlights even starker differences in risk and return potential: Return potential: Stocks have historically delivered 12-15% annual returns over long periods compared to 6-8% for FDs. Volatility: Stock prices can fluctuate dramatically daily, while FD returns remain fixed.
For a tenure of 5 years, the ₹1 Crore FD interest per month can go up to approximately ₹66,666 at an interest of 8%, yielding ₹46.9 Lakhs as total interest earned.
The SBI Amrit Vrishti Scheme 2026 (also known as the SBI 444 Days FD) is a special fixed deposit product from State Bank of India offering a fixed tenure of 444 days with competitive interest rates. As of December 19, 2025, the scheme offers 6.45% p.a. to regular investors.
Most interest income is taxable, but you can get tax-free interest from municipal bonds (often from your home state), U.S. Treasury obligations (federal tax-free), certain Series I/EE savings bonds if used for education, and within tax-advantaged accounts like IRAs/401(k)s (tax-deferred or tax-free in Roths). The IRS requires reporting all interest, but you'll get Form 1099-INT for $10+ from banks, while muni bond interest goes on Schedule B (Form 1040) as tax-exempt.
Unemployment compensation generally is taxable. Inheritances, gifts, cash rebates, alimony payments (for divorce decrees finalized after 2018), child support payments, most healthcare benefits, welfare payments, and money that is reimbursed from qualifying adoptions are deemed nontaxable by the IRS.