India, Feb. 2 -- 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 Rs.40,000 to Rs.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.

The proposal to increase the threshold in section 194A is as below.

Source: Budget Memorandum

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...