Interest on loan against fixed deposit is deductible?

If such OD is for solely for professional purpose then u can claim entire interest as deduction else on proportionate basis.

yes you can claim the interest part as expense if it is for profession u/s 37.

As per sec. 37 three conditions requires to satisfie:

1. it is for business/ profession.
2. it is not in nature of capital &
3. not in nature of personal.