In case your employer deducts more tax than applicable to you as per your IT return filing :
As discussed in the example above, a mismatch between tax deducted by employer and the actual tax payable is taken care of when you file your IT return. When you file your income tax return, you are supposed to quote your bank name and IFSC code. This makes it easier for the income tax department to return the excess tax you've paid.
If your income is below the tax slab and your bank deducts tax on your fixed deposit :
In case your income does not fall under the income tax bracket and your bank has deducted tax on your fixed deposit interest, you can recover the tax amount in two ways.
If your are a senior citizen with fixed deposit accounts :
Senior citizens are exempt from tax deduction on interest earned on fixed deposits. If you are above 60 years of age and have fixed deposit accounts, you are required to fill and submit form 15H to ensure that bank does not deduct income tax on the FD interest earned.
Alternatively, you can get the refund credited to your bank account when you file your IT return. The IT department then calculates the tax applicable to you and adjusts the excess tax paid and credits it back to the bank account you've mentioned in your IT return form.