SBI Deducted ₹5,000 From the Principal Amount Upon FD's Maturity

[CosmicCat]

I am afraid, this additional information is inconsistent with the earlier claim that:

"the TDS can't be anywhere close to ₹4900 on the interest earned on his SCSS deposits for the whole financial year."

So, quite obviously, SBI's claim was correct that:

"On 01.01.2025, threshold limit was crossed."

-- so they rightly applied TDS, starting with 5k (10% of the 50k threshold).

I already acknowledged in my original post that TDS is applicable if the CIF-level interest income exceeded the threshold (₹50,000 for senior citizens). However, that doesn’t automatically justify how SBI calculated ₹4,900 as “Tax on Previous Interest”—especially when:

• Form 15H was already filed for all SCSS deposits at the beginning of the financial year, which banks are supposed to honor unless proven invalid. The sole reason why Form 15H was submitted was, his total income—inclusive of the interest income earned from the bank—was less than the threshold limit set by the Income Tax Department's guidelines to avoid deduction of TDS, and that his tax liability was also zero for FY 2024-25.
• ₹70 was already deducted as TDS for this FD (10% of ₹699).
• No breakup or computation proof was provided for the ₹4,900 deduction.

If SBI believes that cumulative interest exceeded the exemption, they must show exact figures from each quarter, and how much TDS should have been deducted vs how much was, to justify this catch-up deduction. Guesswork or blanket statements don't cut it—especially when ₹4,900 is nearly 7x the actual interest earned on that FD.

No, the point is, you have a very strange idea about the distinction between principal and interest. When the money is paid out on maturity (I.e. not reinvested), what's the difference? The point is, whether the (total Principal + all interest payouts) is actually more or less than the total input principal (I.e. all accounts put together, -- not at each individual account level)!
Just think, where from will the bank (any bank, not just SBI) deduct the money if the still-payable interest does not cover the deductible amount (only because more interest was paid earlier than was actually payable after TDS that was not applied at that point)?

Your point makes no sense at all! Actually, there’s a very clear difference—legally and financially:

• Principal is sacrosanct in a Fixed Deposit contract. The agreement clearly states you’ll get back your entire deposited amount + interest, unless penalized for premature withdrawal.
• Deducting anything from principal at maturity, especially without clear prior disclosure or consent, undermines the terms of the FD contract. If banks start dipping into principal to settle internal calculations, it sets a dangerous precedent, especially for fixed-income senior citizens.
• TDS should always be deducted from interest, not arbitrarily from principal—unless explicitly disclosed in terms or with consent.

This must be there in every bank's policy, and is such common sense that it doesn't need to be communicated in each individual case.

Even “common sense” has to follow due process and transparency. If a shortfall exists, SBI must:

1. Notify the customer, ideally before maturity or deduction,
2. Provide a clear statement showing the deficit and calculations leading to that deduction,
3. Explain why Form 15H wasn’t honored, despite being submitted.

None of that happened here!

This is not about whether TDS is payable or not—it's about how it was handled:

• No notice,
• No computation sheet,
• No explanation for disregarding Form 15H,
• And deduction from principal without disclosure.

These aren't "minor" or "common sense" things—these are core issues of fair banking practice and customer rights.

ask for a refund by filing the ITR.

Of course we’ll claim a refund. But a refund doesn’t mean the bank gets a free pass to violate process or ethics. People deserve accountability and transparency at the source, not just a patchwork remedy later.

 

[Arnal07]

Very tricky situation, given form 15H for all deposits except one declaring that your taxable income is less than 250000. In one deposit,form 15H not given and intrest paid is crossing 50000 at CIF level. For senior citizens,no TDS will be deducted upto 50000 intrest earning.

Form 15H can be submitted when your tax liability is zero unlike form 15G which can only be submitted when total income is below the basic exemption limit.

 

[CosmicCat]

When it comes to accountability, SBI has to be one of the worst PSU banks out there! Period. I’m genuinely frustrated with how they’re handling this case—completely shirking responsibility and making my dad run from pillar to post across different levels of their grievance redressal system for the past 4 months!

Here’s a summary of how the grievance redressal process has gone so far:

• On 6th April 2025, we wrote to our home branch’s Zonal Office (dgm.zo<region>@sbi.co.in) to escalate a complaint that was originally submitted via their CMS portal on 1st January 2025. No response yet. (Here <region> is a three-character name, redacted from this forum due to privacy reasons.)
  
  
• Out of sheer frustration, we wrote to the Principal Nodal Officer (PNO)—the General Manager, Customer Service—at gm.customer@sbi.co.in on Sunday, 27th April. Surprisingly, we got a response the same day (yes, on a Sunday), but instead of taking any accountability, they simply asked us to write to a lower level, the Nodal Office, at “agmcustomer.lho<region>@sbi.co.in”. It seems their PNO inbox runs on the same CRM as their Level 1 support, possibly even handled by the same team—so much for escalation.
  
  
• On the same day, we emailed agmcustomer.lho<region>@sbi.co.in, and received a reply on 28th April. And guess what? They wrote: "We submit that we have taken up the matter with the Branch / Office concerned and have since been working on your queries / issues to come up with an appropriate resolution at the earliest. For further query you may also contact branch at their mail id sbi.<home_branch_code>@sbi.co.in."
  So we’re essentially right back where we started. 🤦

Looks like SBI has taken their legendary "Go to the next counter" game to the digital age. Now it’s not just counters—it's counter-after-counter in email form, and you just keep getting bounced around like it’s some kind of bureaucratic relay race.

Now, it's been three days, and the branch still hasn’t responded. If this were a private bank, my dad would likely have received a resolution the same day.

I’m now debating the next step:

1. Should I escalate this directly to the Managing Director, Retail Banking & Operations at SBI, even if that’s technically outside the standard grievance redressal protocol? (With other companies, this often helps.)
2. Or should I take it to the RBI Ombudsman, especially since it’s been 5 months since the complaint was first filed, and possibly request compensation for the inaction and harassment?

 

[Strange]

When it comes to accountability, SBI has to be one of the worst PSU banks out there! Period. I’m genuinely frustrated with how they’re handling this case—completely shirking responsibility and making my dad run from pillar to post across different levels of their grievance redressal system for the past 4 months!

Here’s a summary of how the grievance redressal process has gone so far:

• On 6th April 2025, we wrote to our home branch’s Zonal Office (dgm.zo<region>@sbi.co.in) to escalate a complaint that was originally submitted via their CMS portal on 1st January 2025. No response yet. (Here <region> is a three-character name, redacted from this forum due to privacy reasons.)
  
  
• Out of sheer frustration, we wrote to the Principal Nodal Officer (PNO)—the General Manager, Customer Service—at gm.customer@sbi.co.in on Sunday, 27th April. Surprisingly, we got a response the same day (yes, on a Sunday), but instead of taking any accountability, they simply asked us to write to a lower level, the Nodal Office, at “agmcustomer.lho<region>@sbi.co.in”. It seems their PNO inbox runs on the same CRM as their Level 1 support, possibly even handled by the same team—so much for escalation.
  
  
• On the same day, we emailed agmcustomer.lho<region>@sbi.co.in, and received a reply on 28th April. And guess what? They wrote: "We submit that we have taken up the matter with the Branch / Office concerned and have since been working on your queries / issues to come up with an appropriate resolution at the earliest. For further query you may also contact branch at their mail id sbi.<home_branch_code>@sbi.co.in."
  So we’re essentially right back where we started. 🤦

Looks like SBI has taken their legendary "Go to the next counter" game to the digital age. Now it’s not just counters—it's counter-after-counter in email form, and you just keep getting bounced around like it’s some kind of bureaucratic relay race.

Now, it's been three days, and the branch still hasn’t responded. If this were a private bank, my dad would likely have received a resolution the same day.

I’m now debating the next step:

1. Should I escalate this directly to the Managing Director, Retail Banking & Operations at SBI, even if that’s technically outside the standard grievance redressal protocol? (With other companies, this often helps.)
2. Or should I take it to the RBI Ombudsman, especially since it’s been 5 months since the complaint was first filed, and possibly request compensation for the inaction and harassment?

RBI Bamboodsman ke bamboo ke bina nahi sunega SBI.

 

[hender]

RBI Bamboodsman ke bamboo ke bina nahi sunega SBI.

Ajkal baccha log ni sunta, SBI to bujurg hai 😉

 

[CosmicCat]

RBI Bamboodsman ke bamboo ke bina nahi sunega SBI.

Ajkal baccha log ni sunta, SBI to bujurg hai 😉

Usi ka toh dar hai, bhai. SBI chacha ji bahut ghamandi hain. Darr hai ki bina resolution ke complaint close kar denge woh.

 

[hender]

Usi ka toh dar hai, bhai. SBI chacha ji bahut ghamandi hain. Darr hai ki bina resolution ke complaint close kar denge woh.

Sabji mandi me gher lo 😉

 

[6ix9ine]

When it comes to accountability, SBI has to be one of the worst PSU banks out there! Period. I’m genuinely frustrated with how they’re handling this case—completely shirking responsibility and making my dad run from pillar to post across different levels of their grievance redressal system for the past 4 months!

Here’s a summary of how the grievance redressal process has gone so far:

• On 6th April 2025, we wrote to our home branch’s Zonal Office (dgm.zo<region>@sbi.co.in) to escalate a complaint that was originally submitted via their CMS portal on 1st January 2025. No response yet. (Here <region> is a three-character name, redacted from this forum due to privacy reasons.)
  
  
• Out of sheer frustration, we wrote to the Principal Nodal Officer (PNO)—the General Manager, Customer Service—at gm.customer@sbi.co.in on Sunday, 27th April. Surprisingly, we got a response the same day (yes, on a Sunday), but instead of taking any accountability, they simply asked us to write to a lower level, the Nodal Office, at “agmcustomer.lho<region>@sbi.co.in”. It seems their PNO inbox runs on the same CRM as their Level 1 support, possibly even handled by the same team—so much for escalation.
  
  
• On the same day, we emailed agmcustomer.lho<region>@sbi.co.in, and received a reply on 28th April. And guess what? They wrote: "We submit that we have taken up the matter with the Branch / Office concerned and have since been working on your queries / issues to come up with an appropriate resolution at the earliest. For further query you may also contact branch at their mail id sbi.<home_branch_code>@sbi.co.in."
  So we’re essentially right back where we started. 🤦

Looks like SBI has taken their legendary "Go to the next counter" game to the digital age. Now it’s not just counters—it's counter-after-counter in email form, and you just keep getting bounced around like it’s some kind of bureaucratic relay race.

Now, it's been three days, and the branch still hasn’t responded. If this were a private bank, my dad would likely have received a resolution the same day.

I’m now debating the next step:

1. Should I escalate this directly to the Managing Director, Retail Banking & Operations at SBI, even if that’s technically outside the standard grievance redressal protocol? (With other companies, this often helps.)
2. Or should I take it to the RBI Ombudsman, especially since it’s been 5 months since the complaint was first filed, and possibly request compensation for the inaction and harassment?

One piece of advice, if RBI bamboo kar rhe ho.

Try to keep your complaint as simple, simple means don't use AI. AI will unnecessary add multiple words and vocabulary, which will make things difficult, simple - sober language mai likhna sab.

RBI usually closes their eyes jab SBI ke against complaint aati hai. Isiliye bol rha hu simple rakhna sab. Best of luck brother.

 

[CosmicCat]

One piece of advice, if RBI bamboo kar rhe ho.

Try to keep your complaint as simple, simple means don't use AI. AI will unnecessary add multiple words and vocabulary, which will make things difficult, simple- sober language mai likhna sab.

RBI usually closes their eyes jab SBI ke against complaint aati hai. Isiliye bol rha hu simple rakhna sab. Best of luck brother.

Thanks for the suggestions, mate! I really appreciate it.

I usually keep my complaints simple, crisp, and to the point, since I understand no one has the time to read long messages when you're dealing with a high volume daily. 🙂

By the way, do you happen to know if SBI offers any compensation for the inconvenience or mental distress caused when the case is escalated to RBIO? I couldn’t find any post on this forum where someone shared their experience with SBI in this regard. That said, I do remember @SJM receiving compensation from Canara Bank — another PSU — after escalating his case to the RBI Ombudsman.

 

[SJM]

Thanks for the suggestions, mate! I really appreciate it.

I usually keep my complaints simple, crisp, and to the point, since I understand no one has the time to read long messages when you're dealing with a high volume daily. 🙂

By the way, do you happen to know if SBI offers any compensation for the inconvenience or mental distress caused when the case is escalated to RBIO? I couldn’t find any post on this forum where someone shared their experience with SBI in this regard. That said, I do remember @SJM receiving compensation from Canara Bank — another PSU — after escalating his case to the RBI Ombudsman.

It is not up to SBI. It is up to BO and bank has to comply.

 

[6ix9ine]

Thanks for the suggestions, mate! I really appreciate it.

I usually keep my complaints simple, crisp, and to the point, since I understand no one has the time to read long messages when you're dealing with a high volume daily. 🙂

By the way, do you happen to know if SBI offers any compensation for the inconvenience or mental distress caused when the case is escalated to RBIO? I couldn’t find any post on this forum where someone shared their experience with SBI in this regard. That said, I do remember @SJM receiving compensation from Canara Bank — another PSU — after escalating his case to the RBI Ombudsman.

SBI won't pay a single penny from their end, unless your regional BO tells them to compensate you for mental harassment etc.

 

[SJM]

This incident happened with my dad back in Jan 2025. My dad holds a couple of Senior Citizen Savings Scheme (SCSS) deposits at SBI. Like every year, he also submitted the Form 15H online for all his SCSS deposits in the beginning of the financial year (April 2024).

Back in October 2024, he opened an FD of ₹50,000 with a tenure of 3 months, and it was scheduled to mature on 1st January, 2025. It was his first and the only FD held during that financial year within SBI. Since the principal amount and the tenure was short, he didn't bother to file Form 15H for it.

From that FD, he expected to earn an interest of ₹699 upon maturity. But when it was matured, he was stunned to notice that instead of crediting ₹50,699 into his savings account, they credited ₹45,729 only! So, they essentially deducted around ₹5,000 from the principal amount!

When I looked at the FD's statement, I was stunned to see the following transactions:
View attachment 89398

While deducting a TDS of ₹70, which is 10% of 699 (The interest amount upon maturity), stands justified since he hadn't submitted Form 15H for it separately, why would they debit ₹4,900 more as "Tax on Previous Interest" when the Form 15H for all other deposits were submitted already?

He raised a complaint on their CMS portal the same day, and got the following response from the bank:


This makes no sense at all! He even coordinated with the Branch Manager various times, but they were helpless and provided no solution.

Even the TRACES portal shows no trace of this TDS deduction (Perhaps since they haven't submitted the details of the TDS for the Jan-Mar '25 quarter yet.)

He raised no complaints thereafter. So, I need you guys' opinion about what I should do next:

1. Should I raise it to the Nodal Office and thereafter to RBI Ombudsman if unsatisfied and demand a hefty compensation?
2. Or just be patient, and get the TDS refunded back after filing the ITR (Which he shall do in June/July)?
3. Or anything else?

Thanks in anticipation.


EDIT (10/04/2025):

1. I reviewed my father's account statement and calculated the total quarterly interest he receives from all his SCSS deposits combined. It amounts to ₹49,000 per quarter.
   
   
2. SBI’s system is designed to deduct TDS on a quarterly basis if Form 15G/H has not been submitted. However, in this case, Form 15H was submitted by my father already at the beginning of FY 2024-25 for all SCSS deposits. For some reason, their system failed to recognize the submitted Form 15H for the Oct–Dec 2024 quarter, which is the same quarter in which the ₹50,000 FD was opened.
   
   As a result, when the FD matured on 1st January 2025, SBI overrode the Form 15H declaration and deducted TDS of:
   1. ₹70 (10% of ₹699 interest on the FD), which is justified, and
   2. ₹4,900 as “Tax on Previous Interest” — essentially 10% of the ₹49,000 quarterly SCSS interest, which should have been exempt due to the submitted Form 15H. They deducted it from the aforementioned FD's principal amount, which is really unethical.
   
   
3. Interestingly, no TDS was deducted in the Jan–Mar 2025 quarter, which further supports the conclusion that this was a system error or a glitch on SBI’s part. This caused unnecessary financial confusion and mental distress to my father, who has been a loyal SBI customer for over 30 years.

Complaint to PNO, send a reminder after 15 days, wait for reply (30 days in case of no reply). If problem not resolved by PNO then complaint to RBIO.

Compensation is not paid for mistakes, mistakes happen. Compensation is paid for harassment and financial loss. You can calculate the loss of interest on the 4900 deducted and claim it as financial loss.

 

[CosmicCat]

Complaint to PNO, send a reminder after 15 days, wait for reply (30 days in case of no reply). If problem not resolved by PNO then complaint to RBIO.

Already did, but had no help. 😔

Read here: https://www.technofino.in/community/threads/sbi-deducted-₹5-000-from-the-principal-amount-upon-fds-maturity.39836/post-1007837

 

[SJM]

Already did, but had no help. 😔

Read here: https://www.technofino.in/community/threads/sbi-deducted-₹5-000-from-the-principal-amount-upon-fds-maturity.39836/post-1007837

ok...then you can proceed to RBIO. Job of grievance redressal is to resolve your grievance, not to redirect you somewhere else.

 

[hender]

Complaint to PNO, send a reminder after 15 days, wait for reply (30 days in case of no reply). If problem not resolved by PNO then complaint to RBIO.

Compensation is not paid for mistakes, mistakes happen. Compensation is paid for harassment and financial loss. You can calculate the loss of interest on the 4900 deducted and claim it as financial loss.

On 4900 @ 7.25 % PA,
Interest would be 90 per qtr.
Worth fighting 🤔

 

[CosmicCat]

7.2 % PA,

How did you even come to this figure? Their savings account interest rate is 2.7% p.a., not 7.2%. 😂

 

[hender]

How did you even come to this figure? Their savings account interest rate is 2.7% p.a., not 7.2%. 😂

On F D

 

[hender]

How did you even come to this figure? Their savings account interest rate is 2.7% p.a., not 7.2%. 😂

On saving it would be 35 per Qtr

 

[SJM]

On 4900 @ 7.25 % PA,
Interest would be 90 per qtr.
Worth fighting 🤔

Maybe not the interest itself, but there is a possibility of getting a compensation.

Fighting = 20-30 min time to draft a complaint to RBIO.

 

[CosmicCat]

Maybe not the interest itself, but there is a possibility of getting a compensation.

Fighting = 20-30 min time to draft a complaint to RBIO.

True that. Four months isn't really a short time though. And showing no compassion on top.

Any suggestion on how much should be the reasonable compensation amount I should seek? I don't want to be too unreasonable.