Archive · 6 Sep 2026
Salary TDS May Not Cover FD Income, Risking September Penalties
Your employer takes tax from your salary, but that may not cover money earned elsewhere.
A fixed deposit can create extra income through interest.
For example, a ₹15 lakh deposit earning 7% produces ₹1,05,000 in one year.
The bank may take 10% as TDS, but someone in a higher tax slab may owe more.
The article says this can leave ₹22,260 still unpaid after the bank’s deduction.
If the unpaid yearly tax exceeds ₹10,000, advance-tax rules may apply.
Taxpayers are expected to pay parts of the amount during the year, including by September 15.
Missing that instalment can lead to separate interest under Section 234C.
Paying everything in March does not erase interest already triggered by a missed instalment.
Employer-deducted TDS covers salary income but not necessarily fixed-deposit interest or other outside earnings.
A ₹15 lakh fixed deposit earning 7% annually produces ₹1,05,000 in interest income.
The bank’s 10% TDS would be ₹10,500, while a 30% slab liability is cited as ₹32,760.
After bank TDS, the article says ₹22,260 remains payable and advance-tax instalments may apply.
Missing the September 15 instalment can trigger Section 234C interest, which the article estimates at about ₹300.
- Who
- Salaried taxpayers with fixed-deposit interest or other non-salary income, as well as certified financial planner Ritesh Sabharwal.
- What
- Taxpayers may owe advance tax and Section 234C interest when bank TDS on fixed-deposit interest is less than their final tax liability.
- When
- The relevant advance-tax deadline highlighted is September 15; other instalment dates cited are June 15, December 15 and March 15.
- Where
- The article discusses obligations under Indian income-tax regulations.
- Why
- Employer TDS covers salary income, while bank TDS may not fully cover tax due on fixed-deposit interest and other outside earnings.
- Example investment
- ₹15 lakh fixed deposit
- Annual interest rate
- 7%
- Annual interest income
- ₹1,05,000
- Bank TDS in example
- ₹10,500, based on a 10% deduction
- Tax liability cited for 30% slab
- ₹32,760
- Balance after bank TDS
- ₹22,260
- September instalment
- 45% of the applicable liability is due by September 15
- Potential Section 234C interest
- The article estimates about ₹300, at 1% a month for three months