TDS on FD — Fixed Deposit Interest TDS Rate, Threshold & How to Avoid It

Updated: 3 June 2026 | Section 194A, Income Tax Act | Budget 2025 thresholds

Banks deduct TDS at 10% on FD interest if the annual interest exceeds ₹50,000 for senior citizens (60+) or ₹40,000 for others — thresholds updated in Budget 2025. If PAN is not provided, TDS rate jumps to 20%. For NRIs, TDS is 30%. Submit Form 15G (below 60) or Form 15H (60+) at the start of each financial year to request zero TDS deduction if total income is below the taxable limit. TDS deducted is reflected in Form 26AS and can be claimed as a credit while filing ITR.

₹50,000

TDS threshold on FD interest for senior citizens — Budget 2025
Interest from all branches of a single bank is aggregated. Threshold applies per bank, not per FD account.

TDS Threshold on FD Interest — FY 2025-26 vs Earlier

Category	FY 2025-26 (Budget 2025)	Earlier (Pre-Budget 2025)	Change
Individuals below 60 years	₹40,000	₹40,000	No change
Senior Citizens (60+ years)	₹50,000	₹50,000	No change
Note: These thresholds apply to aggregate interest from all FDs across all branches of one bank. Co-operative banks and post offices have separate thresholds (₹40,000 / ₹50,000 as applicable).

TDS Rates on FD Interest

Situation	TDS Rate	Note
Resident individual — PAN provided	10%	Standard rate under Section 194A
Resident individual — PAN not provided	20%	Higher rate under Section 206AA
Non-Resident Indian (NRI)	30%	+ surcharge + 4% cess; DTAA may reduce rate
Form 15G / 15H submitted	Nil	Bank does not deduct TDS — only if eligible

How to Avoid TDS on FD — Form 15G and 15H

If your estimated total income for the financial year is below the taxable threshold, you can submit a self-declaration form to your bank to prevent TDS deduction:

Form	Who Should Submit	Eligibility Condition	When to Submit
Form 15G	Individuals below 60 years, HUF	Estimated total income below ₹2.5L (old regime) or below ₹7L effective (new regime with rebate)	Start of each FY; or when opening a new FD
Form 15H	Senior citizens (60+ years)	Estimated total income below taxable limit (₹3L old regime basic exemption)	Start of each FY; or when opening a new FD

Frequently Asked Questions

What is the TDS rate on FD interest?

The TDS rate on FD (fixed deposit) interest is 10% if you have provided your PAN to the bank. If PAN is not provided, the TDS rate is 20%. For NRIs, TDS on FD interest is 30% plus applicable surcharge and cess. The 10% TDS rate applies to all resident individuals regardless of their income tax slab — it is a deduction at source, not a final tax. You will receive credit for TDS deducted in Form 26AS and can claim a refund or set-off when filing your ITR.

How do I avoid TDS on FD interest using Form 15G?

You can submit Form 15G (for individuals below 60 years) or Form 15H (for individuals 60 years and above) to your bank at the start of each financial year to request no TDS deduction. Eligibility: your estimated total income for the year must be below the basic exemption limit (₹2.5L for below 60, ₹3L for senior citizens under old regime; ₹7L effective for new regime with rebate). Submit the form to each bank branch where you hold FDs. It must be renewed every financial year. Banks are required to file these with the Income Tax department.

What is the TDS threshold on FD interest for senior citizens?

For senior citizens (60 years and above), TDS on FD interest is deducted only if the aggregate interest income from all branches of a bank exceeds ₹50,000 per financial year — this enhanced threshold was announced in Budget 2025. For individuals below 60 years, the TDS threshold is ₹40,000 per bank per year (also increased in Budget 2025, from earlier ₹10,000/₹40,000 limits). These thresholds apply per bank, not per FD. If you hold FDs across multiple banks, each bank independently applies the threshold.

Is FD interest fully taxable even after TDS is deducted?

Yes. TDS deducted by the bank is just an advance tax collection — it does not mean FD interest is exempt. The full FD interest (before TDS) must be declared under the head "Income from Other Sources" in your ITR. If your total income falls in a higher tax slab (e.g., 30%), you will need to pay additional tax beyond the 10% TDS. Conversely, if your income is below the taxable limit, you can claim a full refund of TDS deducted by filing an ITR. The tax-exempt status of FD interest only applies if you use a 5-year Tax Saving FD under 80C (only the principal investment is deductible, not the interest).

How do I claim a TDS refund on FD interest?

To claim a TDS refund on FD interest: (1) Ensure the TDS is reflected in your Form 26AS (under Annual Information Statement — check on the income tax portal). (2) File your ITR and declare the FD interest under "Income from Other Sources." (3) In the tax computation section, the TDS credit will be automatically applied against your total tax liability. (4) If TDS exceeds your actual tax (e.g., income below taxable limit), the excess will be shown as refund. (5) The refund is processed by the Income Tax department, typically within 3–6 months of ITR processing, credited directly to your bank account.

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