TDS on FD Interest —
Rate, Threshold & Form 15G
How much TDS a bank deducts on fixed-deposit interest, the new Budget-2025 thresholds (₹50,000 / ₹1,00,000), why FD interest is still fully taxable, and how to stop or reclaim TDS with Form 15G/15H.
A bank deducts TDS at 10% on fixed-deposit interest under Section 194A once the interest paid in a financial year crosses ₹50,000 (₹1,00,000 for senior citizens) — the thresholds raised by Budget 2025 effective 1 April 2025. If you do not give your PAN, the rate jumps to 20%; for an NRI it is 30% plus surcharge and cess. TDS is only an advance collection — the full interest is still taxable — so submit Form 15G/15H to stop it, or claim it back in your ITR.
TDS Rate on FD Interest
The bank deducts TDS on the interest it credits — not on your FD principal — at the time of credit or payment, whichever is earlier. The rate depends only on your residential status and whether the bank has your PAN. See the full TDS rate chart 2025-26.
| Depositor | TDS Rate | Note |
|---|---|---|
| Resident — PAN given | 10% | Standard rate under Section 194A |
| Resident — PAN not given | 20% | Higher rate under Section 206AA |
| Non-Resident (NRO FD) | 30%* | + surcharge + 4% cess; DTAA may reduce it |
| Form 15G / 15H filed & eligible | Nil | Bank does not deduct — only if income below limit |
* NRE and FCNR fixed-deposit interest is exempt from tax, so no TDS applies; TDS at 30% applies to NRO deposits. There is no surcharge or cess on TDS for resident depositors.
The 10% deducted is a flat advance, not a slab-based final tax. If you are in the 20% or 30% bracket you must pay the balance tax on FD interest when filing; if your income is below the exemption limit the entire TDS is refundable. Never treat FD interest as tax-free just because TDS was cut.
TDS Threshold on FD Interest — What Changed
No TDS is deducted until the aggregate FD interest a bank pays you in the financial year crosses the threshold. Budget 2025 raised these limits with effect from 1 April 2025 (FY 2025-26).
| Depositor | FY 2025-26 (Budget 2025) | Earlier | Change |
|---|---|---|---|
| Individuals below 60 | ₹50,000 | ₹40,000 | Raised |
| Senior citizens (60+) | ₹1,00,000 | ₹50,000 | Raised |
| Non-bank / company payer (194A) | ₹10,000 | ₹5,000 | Raised |
Thresholds apply to the aggregate interest across all branches of one bank, per financial year — not per FD or per branch. Co-operative bank and post-office deposits share the same ₹50,000 / ₹1,00,000 limits.
- ₹50,000 — interest ceiling before TDS for a depositor below 60 (banks, co-op banks, post office)
- ₹1,00,000 — the higher ceiling for a senior citizen (60 and above)
- The limit is per bank — spreading FDs across banks keeps each below the threshold, but the interest is still fully taxable in your ITR.
Section 206AB — the higher TDS rate for people who had not filed their returns — was omitted with effect from 1 April 2025. Banks no longer run a return-filing check before deducting 194A TDS on your FD; only the Section 206AA 20% rate for a missing PAN remains.
Not sure if your FD interest crosses the threshold this year? Get it reviewed.
Talk to a TDS Expert →How to Avoid TDS on FD — Form 15G & 15H
If your estimated total income for the year is below the taxable limit, file a self-declaration with the bank so it does not deduct TDS. Use Form 15G if you are below 60 and Form 15H if you are a senior citizen.
| Form | Who files it | Condition | When |
|---|---|---|---|
| Form 15G | Resident individual below 60 / HUF | Estimated total income below the taxable limit and total interest within the basic exemption | Start of each FY (or on opening the FD) |
| Form 15H | Resident senior citizen (60+) | Estimated tax on total income is nil for the year | Start of each FY (or on opening the FD) |
Both forms must be renewed every financial year and filed at each bank branch where you hold deposits. A wrong 15G/15H declaration is a false statement and can attract penalty.
Senior citizen — ₹1,20,000 FD interest
Below 60 — ₹45,000 FD interest
Once the threshold is crossed, 10% TDS applies to the entire year's FD interest with that bank, not only the amount above ₹50,000 / ₹1,00,000. In the example above the senior citizen's TDS is 10% of the full ₹1,20,000, not of the ₹20,000 excess.
Need to file Form 15G/15H or fix a wrong TDS deduction? Get expert help.
Talk to TaxClue →Claiming FD TDS Credit & Refund in Your ITR
FD interest is taxed under Income from Other Sources. The TDS the bank cut appears in your Form 26AS and AIS, and is set off against your tax when you file. If TDS is more than your actual tax, the excess is refunded.
- Give PAN to every bank to avoid 20% TDS
- File Form 15G/15H early if income is below the limit
- Check FD interest in Form 26AS and AIS
- Declare full interest under Income from Other Sources
- Claim the TDS credit while filing the ITR
- Reconcile bank interest certificate with 26AS
A 5-year tax-saving FD gives an 80C deduction on the amount invested (up to ₹1.5 lakh), but the interest it earns is still fully taxable and subject to the same 10% TDS. Only the principal, not the interest, gets the tax benefit.
| Section | Applies to | TDS rate | Threshold (FY 2025-26) |
|---|---|---|---|
| 194A | Bank / co-op / post-office FD interest | 10% | ₹50,000 · ₹1,00,000 (senior) |
| 194A | Interest from a company / others | 10% | ₹10,000 |
| 206AA | Any 194A payee without PAN | 20% | — |
| 195 | NRO FD interest (non-resident) | 30%* | — |
* Plus surcharge and cess; a DTAA and Form 10F/TRC can reduce the rate. See the full TDS chart for other sections.
TDS on FD — Frequently Asked Questions
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