Section 194A TDS Regulations (2026)
Under Section 194A of the Income Tax Act, banks and post offices are legally required to deduct Tax Deducted at Source (TDS) at 10% on fixed deposit interest when annual earnings exceed ₹40,000 for regular individuals (or ₹50,000 for senior citizens).
Many depositors mistakenly assume that bank TDS deduction represents their complete tax liability; however, if your taxable income falls in the 20% or 30% slab, you must pay the remaining balance as advance tax or self-assessment tax. Calculate your baseline deposit returns on our fixed deposit calculator and determine net earnings after taxes with our post-tax FD calculator. Check penalties for delayed tax deposits using our TDS late payment penalty calculator, plan your quarterly tax obligations on our advance tax calculator, compute overall slab liabilities on our income tax calculator, and explore 100% tax-exempt sovereign compounding on our PPF calculator.
| 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!