As per section 206AA introduced by Finance (No.2) Act, 2009 w.e.f. 01.04.2010, every person who receives income on which TDS as deductible shall furnish his PAN, failing which TDS shall be deducted at the rate of 20% (as against 10% which is existing TDS rate) in case of Domestic deposits and 30% + education cess in case of NRO deposits.
Please further note that in the absence of PAN, Form 15G/H and other exemption certificates will be invalid even if submitted & penal TDS will be applicable.
Please confirm from your branch that your PAN is updated with the bank.
Tax Deductions for Term Deposits/ Reinvestment Plan (STDRs)
TDS will be deducted when interest payable or reinvested per customer, exceeds Rs. 10,000 in a financial year. A consolidated quarterly TDS Certificate (Form 16 A) will be issued to you, containing details of all TDS deductions during the quarter.
If you are exempt from paying tax, you need to submit Form 15G/15H when you open a Term Deposit and subsequently at the beginning of the following financial year.
TDS will be deducted on the basis of interest accrued on the Term Deposit(s) also even if the interest has not been credited/ re-invested.
In case of renewed deposits, the new deposit amount consist of the original amount plus interest less Tax Deduced at Source (if any), less compounding effect on TDS. At times, it may lead to recovery of TDS from the principal amount of the deposit.