TDS on SBI FD - TDS Rates and Rules in 2026

What is TDS on FD SBI?

TDS is a taxation process where the applicable tax is deduced at source. This implies the SBI deducts a small amount as tax from the interest received on your Fixed Deposit (FD) and pays you the balance. The process is done to ensure compliance with tax laws and to avoid tax evasion.

If total FD interest in a financial year is over ₹50,000 for ordinary citizens and above ₹1,00,000 for senior citizens, then SBI deducts TDS at the applicable rate. The amount so deducted is submitted with Income Tax Department against your PAN.

For instance, if a regular citizen earns ₹60,000 as FD interest from SBI in a financial year, SBI deducts TDS on the whole ₹60,000 at the rate applicable. 

Key TDS Rates and Rules on SBI Fixed Deposits

The following pointers explains the main TDS rules that apply to interest earned on SBI Fixed Deposits under the Income Tax Act, 2025.

• Threshold Limits: SBI does not deduct TDS on every fixed deposit. It comes into effect only when the total interest earned during a financial year exceeds ₹50,000. For senior citizens, this limit is ₹1,00,000. Once the threshold is reached, TDS is deducted on the whole interest amount and not the amount in excess of the limit.
• TDS Rate: SBI deducts TDS at 10% if you have filed your PAN and linked it with your account.
• Missing or Unlinked PAN: If your PAN is not available or not linked with your account, the bank would deduct TDS at 20% as per the applicable tax regulations.
• Interest Accrual: The deduction is made at the time when interest amount is credited to your fixed deposit or savings account. Whether you immediately take out the interest or leave it in the account, it doesn’t matter.
• Bank Level Calculation: Your TDS threshold is calculated on the total FD interest collected by you across all your SBI branches and not across deposits held with various banks.
• TDS Certificate: SBI issues Form 131 (old Form 16A) as per Income Tax Act 2025 guidelines. The certificate shows the amount of TDS deducted from your FD interest and can be used while filing your income tax return. 

How to Avoid TDS on SBI FDs

If your total income is below the taxable limit, you can stop SBI from taking TDS by filing Form 121. Those eligible depositors who have nil estimated tax liability in the tax year as per the provisions of Income Tax Act, 2025 can file Form 121 to seek exemption from the bank for deduction of TDS on FD interest.

It is advised to file Form 121 at the beginning of the tax year through available SBI channels like Internet Banking, YONO SBI app, or home branch wherever facility is available.

File Form 121 only if you meet the eligibility conditions provided. Sometimes submitting incorrect information may lead to fines under Income Tax Act, 2025. 

How to Check and Claim TDS

To verify the TDS deducted on your SBI Fixed Deposit, you can use the following methods: 

• Bank statement or a Passbook: Look for the TDS item against your FD interest which is generally well noted.
• Form 168 (Old Form 26AS): Form 168 (applicable for tax year 2026-27) can be downloaded at the Income Tax e-filing portal. It shows TDS deducted against your PAN and other tax-related details. 

If you are not liable to pay income tax, you can claim the deducted TDS amount back while filing your income tax return (ITR) and the government will refund the excess tax to your bank account.

Always ensure your PAN is linked to your bank account to avoid greater taxes and deductions and to routinely track your interest income.  

Key Takeaways  

Knowing how TDS on FD SBI works can save you from losing money to unexpected and unknown tax deductions. The SBI FD TDS rate is 10% with PAN and 20% without PAN. If you are eligible to submit Form 121 under the Income Tax Act, 2025, you can request SBI not to deduct TDS on your FD interest. Also, whether you invest at the prevailing SBI FD rates or renew your deposits, keeping track of your interest income and TDS details makes it easier to claim refunds and file your income tax return correctly.