According to reports from Mint, retirees cannot claim tax credit on their spouse's fixed deposit income under the new income tax provisions effective from April 1, 2026. Since the interest earned on the deposit is subject to clubbing provisions, it is not treated as the spouse's taxable income. Therefore, they are not eligible to furnish the Form 121 declaration to avoid Tax Deducted at Source (TDS) deductions.
As reported by Mint, for taxpayers who are not classified as senior citizens, a declaration seeking non-deduction of tax at source on specified income can be furnished only when the tax liability on their total income is nil and the income covered by the declaration does not exceed the applicable basic exemption limit. Senior citizens face different requirements, needing to satisfy the condition that no tax is payable on their total income, including the income for which the declaration is being submitted. Consequently, in the case of a non-senior citizen, tax may still be deducted at source even if the final tax liability becomes nil because of rebate available under Section 156 of the Income Tax Act, 2025, if the total interest income for the year exceeds the relevant basic exemption threshold.
According to Mint, any TDS deducted by the bank on interest credited to your wife's account can be claimed by you while filing your income tax return. The return filing system provides a mechanism to claim TDS relating to the income of a spouse or minor child that is clubbed with the taxpayer's income. While reporting the interest income in your return, ensure that your wife's PAN is correctly mentioned so that the corresponding TDS credit is reflected and can be claimed without difficulty.
As reported by Mint, senior citizens heavily favour time-tested avenues like bank fixed deposits and small savings schemes as traditionally conservative investors. Banks reserve their most lucrative interest rates for special, limited-tenure deposit schemes, with premium senior citizen FD rates applying exclusively to domestic retail deposits valued below ₹3 crore. Among public sector banks, Indian Bank offers the highest rate at 7.30%, while Equitas Small Finance Bank provides the best rate at 8.25% among small finance banks.
According to Mint, private sector banks offer competitive rates for senior citizens, with Yes Bank providing the highest rate at 7.75%. Kotak Mahindra Bank and IndusInd Bank also offer 7.75% rates, while Axis Bank offers 7.20%. HDFC Bank and ICICI Bank provide rates of 7.00% and 7.00% respectively, as reported by Mint.
