Did you put an FD in your wife's name? A step-by-step guide on how to claim the tax credit back in your ITR

Put an FD in your spouse's name? The tax still lands on you. But so does the TDS credit, if you know exactly how to claim it. Here's the complete guide.

Under Indian tax law, if the money used to create a Fixed Deposit belongs to you, the interest earned is not your spouse's income, it is yours. Section 64 of the Income Tax Act, known as the clubbing of income provision, pulls that interest straight into your tax return regardless of whose name the FD sits in.

This means two things. First, you must declare that interest income in your own ITR. Second, and this is where most people lose money, the TDS the bank deducted against your spouse's PAN can be claimed back by you. But only if you follow the exact process.

Before you can claim the TDS credit, your spouse needs to submit a written declaration to the bank stating that the FD interest income legally belongs to you, complete with your PAN details. This declaration triggers the bank to report the TDS against your PAN rather than your spouse's, making the credit traceable and claimable in your ITR. Without this step, the TDS sits stranded against your spouse's PAN and claiming it becomes significantly more complicated.

Do this at the start of every financial year. It is a small administrative step that saves considerable paperwork at filing time.

You cannot use ITR-1 for this. The process requires ITR-2 or ITR-3, which contain the advanced schedules needed to map third-party tax credits.

Start by opening Schedule OS; Income from Other Sources. Click Add Details under the Interest section and enter the gross interest earned from your spouse's FD. Select the applicable bank name from the dropdown.

Once the income is declared, scroll to the Taxes Paid section of your ITR dashboard and open Schedule TDS. Navigate specifically to Table 2 or Schedule TDS2; the Section for tax deducted on income other than salary. Click Add New to begin entering the credit details.

Inside Schedule TDS2, you will need to enter four specific pieces of information accurately.
Enter the TAN of the bank where the FD is held; this is the Tax Deduction and Collection Account Number, available on your TDS certificate or Form 26AS. Enter the official name of the bank as the deductor.

Enter the total gross interest amount credited during the financial year. Finally, select the correct financial year in which the bank deducted the tax.
Errors at this stage, particularly in the TAN, will cause a mismatch in the tax department's system and can trigger a notice or a rejected credit claim.

This is the step most people miss entirely. Inside Schedule TDS2, locate the dropdown column asking whether the TDS credit belongs to you or another person. Select Other Person or Spouse.

Enter your spouse's exact 10-digit PAN in the field provided. Then input the total TDS amount deducted by the bank under your spouse's PAN. This maps the credit from your spouse's PAN to your own return under Rule 37BA(2) - the specific provision that legally authorises this transfer.

In the next field, enter the same TDS amount as the credit claimed this year to ensure 100% of it applies to your tax liability. Save the entry before proceeding.

Claiming a TDS credit from someone else's PAN without formally disclosing the relationship is a guaranteed route to a tax notice. Avoid it by completing Schedule SPI, the schedule for Income of Specified Persons including spouse and minor children.

*Navigate to Schedule SPI and enter your spouse's name and PAN.
*Select spouse as the relationship type.
*Choose Interest Income as the nature of income and enter the exact amount you declared in Schedule OS.
*Confirm and validate the entry.

This disclosure formally documents the clubbing arrangement and aligns your return with what the tax department expects to see, closing any potential gap that could trigger scrutiny.

Claiming TDS from a spouse's FD is entirely legal, well-established under Rule 37BA(2), and straightforward, but only if every step is completed correctly and in sequence.

Get the bank declaration done early. Use ITR-2 or ITR-3. Declare the income in Schedule OS. Map the credit in Schedule TDS2 with your spouse's PAN. Disclose the arrangement in Schedule SPI. Miss any single step and the credit either gets rejected or sits unclaimed.

The tax department has built the functionality into the portal specifically for this purpose. Use it, and make sure every rupee of TDS deducted on your money comes back to you.