Section 194A — TDS on Interest Income (FD, Banks & Post Office)

Updated: 3 June 2026

Section 194A at a glance: Section 194A requires deduction of TDS on interest income paid by banks, cooperative banks, and post offices (not RBI or government). TDS rate: 10% (PAN provided) or 20% (no PAN). Threshold: ₹40,000/year for banks (regular taxpayers); ₹50,000/year for senior citizens aged 60+ (enhanced in Budget 2025). Cooperative bank interest threshold: ₹40,000. Post office regular schemes: ₹40,000; senior citizens: ₹50,000. Submit Form 15G (under 60) or Form 15H (60+) at the start of the financial year to prevent TDS if your total income is below the taxable limit.

₹50,000 Section 194A TDS threshold for senior citizens (aged 60+) on bank FD interest — enhanced in Budget 2025. Submit Form 15H to avoid TDS if total income is below taxable limit.

Section 194A TDS Thresholds by Institution Type

The TDS threshold under Section 194A varies by the type of institution and the age of the depositor. Interest exceeding the annual threshold triggers TDS at the applicable rate.

Institution Type	Threshold (Regular Taxpayer)	Threshold (Senior Citizen 60+)	TDS Rate (with PAN)	TDS Rate (no PAN)
Scheduled Commercial Bank (FD/RD)	₹40,000 / year	₹50,000 / year	10%	20%
Cooperative Bank	₹40,000 / year	₹50,000 / year	10%	20%
Post Office (time deposits, MIS, etc.)	₹40,000 / year	₹50,000 / year	10%	20%
Savings Bank Account (any bank)	Not applicable — no TDS	Not applicable — no TDS	—	—
PPF (Public Provident Fund)	Fully exempt — no TDS	Fully exempt — no TDS	—	—

Form 15G and Form 15H — Eligibility & Submission

These forms allow eligible taxpayers to declare that their income is below the taxable limit, so the bank does not deduct TDS. They must be submitted at the beginning of every financial year (ideally in April).

Form	Who Can Submit	Key Conditions	Where to Submit	Validity
Form 15G	Individuals below 60 years; HUFs	Total income must be below basic exemption limit (₹2.5L / ₹3L for new regime); estimated interest income must not exceed basic exemption	Bank branch, cooperative bank, post office (also available online via net banking)	One financial year — must re-submit each April
Form 15H	Individuals aged 60 years or above (senior citizens)	Estimated total income for the year must be below taxable limit; no requirement that interest alone be below threshold	Bank branch, cooperative bank, post office (also available online via net banking)	One financial year — must re-submit each April

What Happens if TDS is Deducted Under Section 194A?

If TDS has been deducted by the bank, the amount is reflected in your Form 26AS and AIS. When you file your ITR, declare the full interest income under "Income from Other Sources" and claim credit for TDS already deducted. If your total tax liability is less than the TDS deducted, the excess TDS becomes a refund, which the Income Tax Department processes after filing.

Senior citizens can also claim deduction under Section 80TTB for up to ₹50,000 on interest income from banks, cooperative banks, and post offices, which can significantly reduce or eliminate the tax on this income.

Frequently Asked Questions

What is the TDS rate on bank FD interest under Section 194A?

The TDS rate under Section 194A on bank FD interest is 10% if you have furnished your PAN to the bank. If PAN is not provided, TDS is deducted at 20%. TDS applies only when the total interest credited or paid by the bank during the financial year exceeds the threshold — ₹40,000 for regular taxpayers and ₹50,000 for senior citizens (aged 60 or above, enhanced in Budget 2025). If your total income is below the taxable limit, submit Form 15G (below 60 years) or Form 15H (60+) to prevent TDS deduction.

Does Section 194A apply to savings account interest?

No. Section 194A does not apply to interest on savings bank accounts. TDS is not deducted by banks on savings account interest. However, savings account interest is still taxable in your hands under "Income from Other Sources" and must be declared in your ITR. You can claim a deduction of up to ₹10,000 per year on savings account interest under Section 80TTA (for individuals below 60) or up to ₹50,000 under Section 80TTB (for senior citizens).

How can I avoid TDS on FD interest under Section 194A?

You can avoid TDS deduction by submitting Form 15G (if you are below 60 years and your total income is below the basic exemption limit) or Form 15H (if you are 60 or above and your total estimated income is below the taxable limit). These forms must be submitted at the beginning of each financial year to the bank/institution before interest is credited. Note: submitting 15G/15H when your income is actually taxable is an offence and can attract penalties.

What is the Section 194A TDS threshold for cooperative banks?

For cooperative banks, the TDS threshold under Section 194A is ₹40,000 per year for regular taxpayers. Senior citizens (aged 60+) benefit from the higher threshold of ₹50,000, the same as applicable to commercial banks after the Budget 2025 enhancement. TDS is deducted at 10% (with PAN) or 20% (without PAN) on interest exceeding these limits. The threshold applies to the aggregate interest paid or credited across all accounts at a single bank branch, though CBDT circulars have extended this to the entire bank.

Is TDS deducted on post office deposit interest?

Yes, Section 194A applies to interest on post office deposits under specific schemes. The TDS threshold is ₹40,000 for regular taxpayers and ₹50,000 for senior citizens. Interest on Post Office Savings Account is exempt from TDS (up to ₹3,500 for individuals and ₹7,000 for joint accounts under Section 10(15)). Interest on NSC (National Savings Certificate) is taxable but TDS is not deducted at source — you must self-declare it in your ITR. PPF interest is fully tax-exempt and no TDS applies.

TDS on FD Form 15G TDS Rate Chart Income from Other Sources Form 26AS

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