Interest tax?

Bank deducts 10% TDS on the interest accrued. If this has to be shown in IT return what is the applicable tax to be paid? Is it 20% Flat for Interest earned (Minus TDS) or Is it standard IT rates as per the slab (Minus TDS). As PAN has become mandatory in bank accounts, this will help all the salary persons who has to show the bank tds in the new IT returns.

There is no fixed % of tax on bank interest. It is an income to be taxed at slab rates. If your income including the bank interest is below taxable (say less than 1.1 lakhs for FY:07-08), then it is free of tax. If you already had 2.5 lakhs income and if the interest is another 20thousands, then the interest will be taxed at 30% for FY:07-08.

TDS nothing your advance tax. If your income including bank interest is below taxable, then you get back your TDS amount in full. If you have to pay any tax, then your have to adjust the TDS amount towards tax payable. If you still have to pay any tax after adjusting the TDS amount, then you have to pay it. If the TDS amount is more than the tax payable by you, then you will get back the balance amount as refund.

Example tax calculation:

Tax Calcu. for MALE -Tax free Amt. Rs.110000 FY:07-08

250,000 = Income taxable (excluding bank interest)
020,000 = Add: Bank FD interest
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270,000 = Net Total income taxable as per slab rates
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000,000 = Tax @ 0% On TAX FREE Amt. Rs. 110,000
004,000 = Tax @10%: 1.1 to 1.5 lakhs on Rs. 040,000
020,000 = Tax @20%: 1.5 to 2.5 lakhs on Rs. 100,000
006,000 = Tax @30%: On > 2.5 Lakhs on Rs. 020,000
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030,000 = TAX PAYABLE on net Income Rs. 270,000
000,900 = ADD: Edu. cess @ 3% on tax Rs. 030,000
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030,900 = Net Total Tax Payable.
002,000 = Less TDS on Bank interest (20,000 @10%)
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028,900 = Balance tax payable after adj. TDS amt.
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you have to pay income tax as per applicable slab. by submitting TDS certificate for 10% deducted by bank, you will get credit of the same

Yes, you have to attach TDS (tax deduction at source) deposit certificate from the bank for any particular year with your income tax return.
Usually banks send by mail TDS certificate with deposit details of it for the financial year in the month of March every year.
So, to be safe attach it with your returns and if not, you do not have to worry as your pan no. is with the bank and is mentioned while depositing TDS with the government.