What is this calculator?
This tool applies to India. Interest earned on bank fixed deposits (FDs) is fully taxable as "Income from Other Sources" and is added to your total income, where it is taxed at your applicable income-tax slab rate. Banks also deduct TDS (Tax Deducted at Source) when annual FD interest crosses the threshold (commonly ₹40,000, or ₹50,000 for senior citizens, as per current rules). This calculator estimates your gross interest, the TDS the bank withholds, your total tax liability at your slab, and the net interest you actually keep.
How to use it
Enter your deposit amount, the annual interest rate, the tenure in years, your income-tax slab rate, and the TDS rate applied by the bank (10% if PAN is provided, 20% if not). The calculator shows gross interest, TDS deducted, total tax due at your slab, the additional tax you may need to pay beyond TDS, and your net after-tax interest.
The formula explained
Gross interest is computed as Principal × Rate × Years (simple interest for estimation). TDS is Gross Interest × TDS rate. Your total tax is Gross Interest × slab rate. The net interest you keep is Gross Interest × (1 − slab rate). The "additional tax to pay" is your total slab tax minus the TDS already deducted.
$$\text{Net Interest} = I \times \left(1 - \frac{\text{Tax Slab (\%)}}{100}\right)$$$$\text{where}\quad \left\{ \begin{aligned} I &= \text{Principal (₹)} \times \frac{\text{Rate (\%)}}{100} \times \text{Tenure (yrs)} \\ \text{TDS} &= I \times \frac{\text{TDS Rate (\%)}}{100} \\ \text{Additional Tax} &= \max\!\left(I \times \tfrac{\text{Slab}}{100} - \text{TDS},\ 0\right) \end{aligned} \right.$$
Worked example
Deposit ₹1,00,000 at 7% for 1 year gives gross interest of ₹7,000. At a 30% slab, total tax is ₹2,100 and net interest is ₹4,900. The bank deducts TDS at 10% = ₹700, so you must pay an additional ₹1,400 when filing.
$$I = 1{,}00{,}000 \times \frac{7}{100} \times 1 = 7{,}000$$$$\text{Net Interest} = 7{,}000 \times \left(1 - \frac{30}{100}\right) = 4{,}900$$
FAQ
Is FD interest taxable? Yes — it is added to your income and taxed at your slab rate, regardless of TDS.
What if my income is below the taxable limit? You can submit Form 15G/15H to avoid TDS, but enter 0% as the slab here to see net = gross.
Why is TDS less than my total tax? TDS (10%) is just an advance; you settle the difference at your actual slab rate when filing your return.
