Difference in TD maturity value and Actual value

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Sushil Kale

35 Points Posted on 19 August 2024

I am having a TD of 5yrs wherein the interest will get on maturity. Now the TD is matured but there is a difference in maturity value and actual value which was credited in my account. Upon asking the bank, they said that the TDS amount deducted will not be considered for future interest calculation till maturity of the TD and because of which there is a difference in maturity and actual amount. Please help me in this matter

Replies (2)

Quick Summary

When your Term Deposit (TD) matures, you might notice a difference between the expected maturity value and the actual amount credited. This is often due to Tax Deducted at Source (TDS) on the interest earned. Banks deduct TDS as per Indian tax laws, and this deducted amount isn't usually included in further interest calculations. To potentially avoid or reduce TDS, consider submitting Form 15G/15H if your income is below the taxable limit, or explore cumulative interest options and tax-free investments.

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 20 August 2024

In India, banks deduct TDS (Tax Deducted at Source) on interest earned from term deposits, such as Fixed Deposits (FDs). The loss of amount to be borne by the term depositor is due to the TDS deduction, which is a government mandate. Here's why: 1. *Tax liability*: The interest earned on term deposits is taxable as per Indian income tax laws. 2. *TDS deduction*: Banks deduct TDS on behalf of the government to ensure tax compliance. 3. *Tax credit*: The depositor can claim tax credit for the TDS amount deducted while filing their income tax return. To minimize the loss, depositors can: 1. *Submit Form 15G/15H*: If their total income is below the taxable limit, they can submit Form 15G/15H to avoid TDS deduction. 2. *Opt for cumulative interest*: Some banks offer cumulative interest, where interest is compounded and paid at maturity, reducing TDS liability. 3. *Consider tax-free alternatives*: Look into tax-free investment options, like tax-free bonds or PPF (Public Provident Fund). Remember to consult a tax professional or financial advisor for personalized advice!

Aashok Kumar Sharma

Finance/Compliance Consultant

78018 Points Posted on 08 November 2026

Post office TD maturity vs accrued interest:
• If you offered interest on accrual each year (mercantile basis) and the maturity value differs slightly (rounding, quarterly compounding), offer the difference in the maturity year.
• If you didn't offer interest annually, offer the total interest at maturity (cash basis, consistently followed). Note the AIS may show annual accruals.
• 5-year post office TD deposits qualify for 80C (old regime). The interest is taxable.