Section 194A TDS Regulations (2026)
Banks in India are mandated under Section 194A of the Income Tax Act to deduct tax at source when annual FD interest exceeds designated thresholds.
| Taxpayer Category | Annual Interest Threshold | TDS Rate (with PAN) | TDS Rate (without PAN) |
|---|---|---|---|
| Individual (< 60 Yrs) | ₹40,000 | 10% | 20% (Sec 206AA) |
| Senior Citizen (60+ Yrs) | ₹50,000 | 10% | 20% (Sec 206AA) |
Section 194A TDS Threshold Limits & Rules (2026)
- Regular Taxpayers (< 60 Yrs): Bank TDS triggers when annual FD interest across branches exceeds ₹40,000.
- Senior Citizens (60+ Yrs): Bank TDS triggers when annual FD interest exceeds ₹50,000.
- TDS Rates: 10% TDS with PAN card; 20% TDS under Section 206AA if PAN is not submitted.
Preventing TDS via Form 15G and Form 15H
- Form 15G (Under 60): Submit at start of financial year if total estimated taxable income is below basic exemption limit.
- Form 15H (Senior Citizens): Submit to prevent TDS if net tax liability is zero.
- Section 80TTB Relief: Senior citizens can claim up to ₹50,000 interest deduction on FD/Savings interest income.
FD Tax Refund Hack
If the bank deducted TDS but your overall annual income is non-taxable, file your ITR to claim a 100% direct refund of the deducted TDS with interest!