Section 194A requires TDS on interest (other than interest on securities) paid by banks, cooperative banks, post offices and other payers. The rate is 10% when you have given your PAN and 20% without PAN (Section 206AA). For bank, cooperative-bank and post-office deposits the FY 2025-26 threshold is Rs50,000 per year (Rs1,00,000 for senior citizens aged 60+), both raised in Budget 2025. For interest from other payers the limit is Rs10,000. Submit Form 15G (under 60) or Form 15H (60+) if your total income is below the taxable limit to stop deduction.
Section 194A — Rate & Threshold Table
TDS under Section 194A by type of payer for FY 2025-26 (AY 2026-27), with the applicable threshold and rate. See the full TDS rate chart 2025-26 for other sections.
| Payer / Deposit type | Threshold (general) | Threshold (senior 60+) | Rate (PAN) | Rate (no PAN) |
|---|---|---|---|---|
| Bank FD / RD (scheduled bank) | Rs50,000 | Rs1,00,000 | 10% | 20% |
| Cooperative bank / society | Rs50,000 | Rs1,00,000 | 10% | 20% |
| Post office time deposit / MIS / SCSS | Rs50,000 | Rs1,00,000 | 10% | 20% |
| Interest from any other payer (e.g. company / firm) | Rs10,000 | Rs10,000 | 10% | 20% |
| Savings bank account interest | No TDS | No TDS | — | — |
| PPF / tax-free interest | Exempt | Exempt | — | — |
Section 194A does not apply to interest paid by RBI, Central/State Government schemes notified as exempt, or interest on securities (that is Section 193). Savings-account interest has no TDS but is still taxable.
If the bank does not have your PAN, Section 206AA forces TDS at 20% instead of 10%. Always ensure your PAN is linked to every deposit account. TDS deducted appears in Form 26AS / AIS and is fully creditable when you file your return — you only "lose" it if you never file to claim it back.
Budget 2025 — Higher 194A Thresholds
The Finance Act 2025 raised the Section 194A thresholds with effect from 1 April 2025 (FY 2025-26), so banks now deduct TDS on interest only above the new, higher limits.
Old thresholds
- Bank / co-op / PO — general: Rs40,000
- Senior citizens (60+): Rs50,000
- Other payers: Rs5,000
New thresholds (Budget 2025)
- Bank / co-op / PO — general: Rs50,000
- Senior citizens (60+): Rs1,00,000
- Other payers: Rs10,000
Note the difference between TDS threshold and taxability: crossing the limit only triggers deduction at source; the interest is taxable from the first rupee under "Income from Other Sources". Section 80TTA allows up to Rs10,000 deduction on savings interest (under-60), and Section 80TTB up to Rs50,000 on all deposit interest for senior citizens.
80TTA and 80TTB are Chapter VI-A deductions available under the OLD regime only. Under the new (default) regime for FY 2025-26 they cannot be claimed — but the Section 87A rebate (nil tax up to Rs12 lakh taxable income) usually absorbs modest interest income for small taxpayers.
How Much TDS on FD Interest?
A worked comparison for FY 2025-26 on Rs60,000 of annual bank FD interest, showing why PAN and age matter.
Regular depositor · PAN given
Senior citizen (60+) · PAN given
TDS is deducted on the full interest once the threshold is crossed — not only on the excess. A senior citizen with the same Rs60,000 pays no TDS because their limit is Rs1,00,000, though the interest is still declared in the return.
- Link PAN to every deposit account (avoids 20% TDS)
- Submit Form 15G / 15H in April if income is below the taxable limit
- Match TDS with Form 26AS / AIS before filing
- Declare all interest under Income from Other Sources
- Claim 80TTA / 80TTB (old regime) to reduce tax
Excess TDS on your FD interest? File your return and claim the refund with TaxClue.
File My ITR →Form 15G & Form 15H — Who Can Use Them
If your total income for the year is below the taxable limit, you can self-declare on Form 15G/15H so the bank does not deduct TDS. Submit at the start of each financial year, before interest is credited.
| Form | Who can submit | Key condition |
|---|---|---|
| Form 15G | Individuals below 60 & HUFs | Estimated total income below the basic exemption limit; total interest below exemption |
| Form 15H | Individuals aged 60+ (senior citizens) | Estimated total income for the year below the taxable limit |
Filing 15G/15H when your income is actually taxable is an offence and can attract penalty and prosecution. Both forms are valid for one financial year and must be re-submitted every April.
You can submit 15G / 15H if
- Your total income is below the taxable limit
- You are a resident individual (or HUF for 15G)
- You want to avoid a refund cycle on small interest
Do NOT submit if
- Your income is above the exemption limit
- You are a company, firm or NRI (not eligible)
- You are unsure — wrong declaration is penalised
Even where no TDS is deducted (savings interest, below-threshold FD, or after 15G/15H), the interest remains fully taxable. Cross-check Form 26AS and AIS at filing so nothing is missed and no notice follows.
Section 194A — Frequently Asked Questions
Related TaxClue services
Section 194A TDS & Refunds — Handled by CAs
Whether you need to stop unnecessary TDS with Form 15G/15H, reconcile Form 26AS, or claim a refund of excess TDS on FD interest, TaxClue's CA-led team files it correctly — 100% online, across India.