FD Tax Calculator
What a fixed deposit leaves you after tax — interest taxed every year as it accrues, TDS that is only a tenth of the bill, and the real return once inflation is counted.
What the FD tax calculator does
An FD tax calculator shows what a fixed deposit is worth after tax. Interest is taxable in the year it accrues, even on a cumulative deposit that pays nothing until maturity. Banks deduct 10% TDS above a threshold, but that is on account only — someone in the 30% slab still owes the balance.
Your inputs
Compounding frequency
Most Indian cumulative deposits compound quarterly.
Kind of deposit
No deduction on the deposit; the interest is taxable either way.
Which tax regime are you on?
Your income tax slab
Are you 60 or over?
Raises the withholding threshold to ₹50,000. Section 80TTB is a deduction, so it does not apply under the new regime.
Used to work out whether the deposit gains or loses purchasing power.
What you keep after 5 years
₹12,81,304
The bank would quote ₹14,14,778 at maturity. Tax on the interest takes ₹1,27,568 of it, and part of that leaves the deposit along the way rather than at the end.
- Quoted maturity, before tax
- ₹14,14,778
- Interest earned
- ₹4,08,873
- Tax on it
- − ₹1,27,568
- Effective rate after tax
- 5.08%
A fixed deposit is a bank product covered by DICGC insurance up to ₹5 lakh per depositor per bank; GrowIQ Capital is a mutual fund distributor and does not distribute deposits. Illustration only, computed from the assumptions shown — not a forecast, a projection of any product's performance, or a guarantee. Rates, prices and rules change, so the actual outcome will differ.
After tax and 6% inflation, this loses 0.87% a year
7.00% before tax becomes 5.08% after it, at your 30% slab. Set against 6% inflation that is a real return of -0.87%. The balance grows every year and buys less every year. That is not an argument against holding a deposit — it is the right instrument for money you may need soon — but it is what it costs to keep money safe.
Real return compounds the two rates rather than subtracting them, and the inflation figure is your assumption rather than a published forecast. Illustration only, computed from the assumptions shown — not a forecast, a projection of any product's performance, or a guarantee. Rates, prices and rules change, so the actual outcome will differ.
TDS is not the tax
Banks withhold 10% once a year’s interest passes ₹50,000. That is on account, not in settlement.
Held back by the bank
₹40,887
Actually owed
₹1,27,568
Still to pay yourself
₹86,681
The bank withholds at 10% but your slab is 30%, so ₹86,681 is still yours to pay — as advance tax or when you file. Reading the TDS certificate as the final bill is how that becomes a demand notice.
Withholding also costs more than it withholds: the ₹40,887 taken out stops compounding, so the deposit earns ₹5,906 less interest than the quoted maturity implies.
Withholding is at 20% rather than 10% where PAN has not been furnished to the bank, which is not modelled here. Illustration only, computed from the assumptions shown — not a forecast, a projection of any product's performance, or a guarantee. Rates, prices and rules change, so the actual outcome will differ.
Year by year
Interest is taxable in the year it accrues, even on a cumulative deposit that pays you nothing until maturity. Every one of these years carries a liability and appears in your Annual Information Statement.
| Year | Interest accrued | TDS | Tax due | You still owe | Balance |
|---|---|---|---|---|---|
| 1 | ₹71,859 | ₹7,186 | ₹22,420 | ₹15,234 | ₹10.65L |
| 2 | ₹76,506 | ₹7,651 | ₹23,870 | ₹16,219 | ₹11.34L |
| 3 | ₹81,454 | ₹8,145 | ₹25,414 | ₹17,268 | ₹12.07L |
| 4 | ₹86,722 | ₹8,672 | ₹27,057 | ₹18,385 | ₹12.85L |
| 5 | ₹92,331 | ₹9,233 | ₹28,807 | ₹19,574 | ₹13.68L |
Illustration only, computed from the assumptions shown — not a forecast, a projection of any product's performance, or a guarantee. Rates, prices and rules change, so the actual outcome will differ.
What this assumes
- Your slab rate stays where it is. The tax on each year’s interest depends on your total income that year, which will move. A deduction is applied at the top of your income, so the figures here follow the rate on your last rupee.
- This deposit is your only interest income. The withholding threshold applies per bank, and Section 80TTB is one allowance across every deposit you hold — so several accounts change both.
- Withholding is taken out of the deposit. That is how a cumulative deposit works, and it is why the maturity you receive is below the figure quoted when you opened it.
- Premature withdrawal usually costs a rate penalty of around one per cent and is not modelled. Surcharge is excluded; the 4% cess is included in the tax figures.
No returns are assured or guaranteed. Any illustration of returns is a mathematical projection, not a promise. Bank deposits are covered by DICGC insurance up to ₹5 lakh per depositor per bank. GrowIQ Capital is a mutual fund distributor, does not distribute deposits and does not provide tax advice — this is arithmetic on the figures you entered, for discussion with a qualified tax adviser.
How the FD tax calculation works
Each year: interest = balance × [(1 + r/n)ⁿ − 1], taxed at your slab in that same year
Interest is computed on the balance each year at the compounded rate, and it is taxable in the year it accrues — not at maturity, even on a cumulative deposit that pays nothing until then. The bank withholds 10% once a year's interest passes the threshold, and that withholding leaves the deposit, so it stops compounding and the maturity falls below the quoted figure. TDS is on account: at a 20% or 30% slab the balance is still payable by you. The gross maturity matches the FD calculator on identical inputs; the effective post-tax rate is solved from what you actually keep, and the real rate divides it by inflation rather than subtracting.
Frequently asked questions
Is FD interest taxed every year or only at maturity?
Every year, as it accrues. A cumulative deposit pays nothing until maturity, but the interest credited to it each year is taxable in that year and appears in your Annual Information Statement. Waiting until maturity to declare it understates your income in every earlier year.
Is TDS the full tax on my FD?
No. TDS is 10% withheld on account once the year's interest crosses the threshold. If your marginal rate is 20% or 30% you owe the difference, payable as advance tax or when you file. Below the threshold nothing is withheld at all, and the interest is still fully taxable.
What is the TDS threshold on fixed deposit interest?
₹50,000 of interest in a financial year for an ordinary depositor and ₹1 lakh for a senior citizen, following the Finance Act 2025. Once crossed, the bank withholds on the whole of that year's interest rather than only on the excess. Form 15G or 15H can prevent the deduction where total income is below the taxable limit.
Do senior citizens get relief on FD interest?
Under the old regime, Section 80TTB allows a deduction of up to ₹50,000 a year on deposit interest for those aged 60 and over. It is a deduction, so it is not available under the new regime — though the higher TDS threshold is statutory and applies either way. Section 80TTA is a different relief and covers only savings account interest, not fixed deposits.
Is the interest on a tax-saving FD tax-free?
No. A five-year tax-saving deposit earns a Section 80C deduction on the amount deposited, and its interest is fully taxable every year exactly like any other deposit's. The name refers to the deposit, never to the interest.
Does an FD beat inflation?
Often not, once tax is counted. A deposit paying 7% before tax leaves about 5% after tax at the 30% slab, which is below typical inflation — so the money loses purchasing power while nominally growing. The gap widens the higher your marginal rate.
GrowIQ Capital provides financial data analytics, market information and educational content. We are not a SEBI-registered Investment Adviser or Research Analyst. Nothing on this platform constitutes investment advice or a recommendation to buy or sell any security. No returns are assured or guaranteed. Any illustration of returns is a mathematical projection, not a promise. Past performance is not indicative of future returns and does not guarantee future results.