Big changes are on the way for anyone with bank or post office fixed deposits in India. Starting April 1, 2026, the new Income-tax Act, 2025 brings in fresh draft rules, and they’re about to tighten the reporting requirements for high-value FDs. Right now, these rules are still up for public feedback, but the writing’s on the wall—they’re coming.
So, what’s changing? If you have a PAN card and you deposit more than ₹10 lakh in fixed deposits in a single financial year, your bank or post office must report it to the Income-tax Department. Don’t have a PAN? The bar drops to ₹5 lakh. And it doesn’t matter if you spread the money across different accounts—if your total deposits cross these limits, the taxman gets notified under the updated Statement of Financial Transactions (SFT) rules in 2026.
This isn’t completely new. The government already keeps tabs on big-ticket items like property deals and hefty mutual fund investments. Now, FDs fall under the same spotlight, as authorities push for more transparency and tighter tax compliance.
Why should you care? For starters, the tax department wants to make sure your reported income lines up with your actual financial activity. If you cross the reporting threshold, your deposits get flagged, so it’s even more important to keep your paperwork in order. Plus, having a PAN card really matters now—your reporting threshold is actually double what it is for those without one.
One thing that’s staying the same: the tax on FD interest. You already need to pay tax on the interest you earn—nothing’s changing there. The new rules just mean banks and post offices will report larger deposits, not slap new taxes on your earnings.
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These draft rules are only one part of the Income-tax Act overhaul starting April 2026. Expect new, simpler tax forms, updated PAN requirements for big transactions, and an easier compliance process overall. The old rules from 1962 are getting retired, and the system’s moving online for good.
If you have thoughts or concerns, there’s still time to weigh in before the rules become final. But get ready—once they kick in, tracking and reporting your FDs won’t be optional. It’s a new era for tax compliance in India.
