Assuming no TDS, interest income from FD is added to the total income of the depositor and taxed as per the tax slabs. If the interest income in a financial year exceeds Rs 40, 000 (Rs 50, 000 in case of senior citizens), banks deduct TDS @10% (20% in case of no PAN). TDS that is, Tax Deducted at Source is levied on the interest income on FD. In the case of NBFCs, the threshold limit for interest income is Rs 5,000. If the interest income exceeds Rs 5,000 then NBFCs deduct TDS @10% (20% in case of no PAN).