TDS on FD Interest: Thresholds, Forms 15G/15H and Refunds
Understand TDS on fixed deposit interest in 2026, the ₹50,000 and ₹1 lakh thresholds, how to submit Form 15G or 15H, and how to claim a refund.
FinCalc Bharat Editorial TeamPublished 27 Oct 2026Updated 27 Oct 2026
Key takeaways
TDS on FD interest is generally 10% if your PAN is available, and 20% if it is not.
The threshold is ₹50,000 for most depositors and ₹1,00,000 for senior citizens for FY 2025-26 onwards.
TDS is not the final tax; interest is taxed at your slab rate and reconciled in your return.
Form 15G (non-senior) or 15H (senior) can prevent TDS if your total income is below the taxable limit.
TDS is deducted bank-wise, not across all banks combined, so multiple small deposits can still trigger it.
Banks deduct tax at source (TDS) on fixed deposit interest once the interest credited in a financial year crosses a threshold. The threshold is different for senior citizens, and it changed in recent budgets. Many depositors either pay too much TDS or fail to claim a refund they are entitled to.
This guide explains the current thresholds, how TDS is calculated, when Forms 15G and 15H help, and how to reconcile TDS with your income-tax return.
What is TDS on FD interest?
Interest earned on a fixed deposit is taxable income. Under Section 194A, the bank deducts a portion of that interest and pays it to the government as advance tax. The deduction is a collection mechanism, not a separate tax. You reconcile it when you file your return.
TDS applies to interest, not to the principal. If you invest ₹10 lakh at 7% for one year, the interest is ₹70,000. If the threshold is crossed, TDS is deducted on the interest, not on the ₹10 lakh.
Current thresholds
Section 194A thresholds for FD interest
Depositor
Threshold per bank per financial year
TDS rate with PAN
TDS rate without PAN
Non-senior citizen
₹50,000
10%
20%
Senior citizen
₹1,00,000
10%
20%
The threshold applies to the total interest paid or credited by a single bank or branch, depending on how the bank aggregates deposits. If you have deposits in three banks and each pays ₹40,000 of interest, no single bank may cross the threshold, even though your total interest is ₹1.2 lakh and fully taxable.
Threshold vs taxable income
Crossing the TDS threshold does not decide whether the interest is taxable. All interest is taxable at your slab rate. The threshold only decides whether the bank must deduct TDS.
How TDS is calculated
For a deposit that pays interest annually, TDS is usually deducted when the interest is credited. For cumulative deposits, interest may accrue every year even though you receive it at maturity. Banks generally deduct TDS on the accrued interest annually.
Example: ₹10 lakh at 7% for one year
Item
Amount
Principal
₹10,00,000
Interest
₹70,000
TDS at 10% (non-senior, PAN available)
₹7,000
Interest credited after TDS
₹63,000
Interest taxable in your return
₹70,000
Notice that the full ₹70,000 is taxable, not the ₹63,000 you received. The ₹7,000 TDS is adjusted against your final tax liability or refunded if you paid more than you owe.
Form 15G and Form 15H
If your total income is below the taxable limit, you can submit Form 15G (for non-senior citizens) or Form 15H (for senior citizens) to the bank and request that no TDS be deducted. The form is a declaration, not an exemption from tax.
Form 15G: for individuals below 60 with total income below the taxable limit.
Form 15H: for residents aged 60 or above, with conditions on taxable income.
The declaration is usually valid for one financial year and must be renewed.
It applies to the specific bank; submit it to each bank where you hold deposits.
A false declaration can attract penalties under the Income-tax Act.
Do not submit 15G/15H if you have taxable income
The form is only for people whose total income is below the taxable limit. If you have taxable income and submit it anyway, the tax department can recover the tax with interest and penalties.
How to claim a TDS refund
Download Form 26AS and the Annual Information Statement (AIS) from the income-tax portal.
Check the TDS entries against your bank interest certificates.
Report all interest income in your return, including interest where no TDS was deducted.
Claim credit for the TDS already deducted.
If the total tax paid exceeds your liability, the department processes a refund.
A common mistake is reporting only the interest that appears in Form 26AS. Form 26AS shows TDS entries, not necessarily all interest. If a bank did not deduct TDS because the interest was below the threshold, the income may still appear in AIS or in your bank statement. Report the full interest.
TDS on other deposits
Similar rules apply to interest from recurring deposits, post office time deposits, National Savings Certificates and corporate deposits. The payer may be a bank, post office, company or co-operative society. Check the relevant threshold and the TDS entry in Form 26AS.
Post office schemes may deduct TDS on interest above the applicable threshold.
Corporate fixed deposits and NCDs may have different threshold rules.
Interest from a savings account is generally not subject to TDS, but it is taxable.
Interest on tax-free bonds is generally exempt, but the exemption conditions matter.
Planning tips for depositors
Keep a bank-wise interest summary so you know when a threshold is close.
Submit 15G/15H early in the financial year if you are eligible.
Spread deposits across banks only for legitimate convenience, not to hide income.
Remember that cumulative FD interest is taxed every year even if you receive it at maturity.
Use the income-tax portal's AIS to cross-check interest reported by banks.
Seniors should check the higher threshold
Senior citizens get a higher TDS threshold and may also have a higher basic exemption limit, depending on the regime. Check both before assuming that no TDS means no tax.
General information, not tax advice
Thresholds and rates can change with each Finance Act. Confirm the current rules on the income-tax portal or with a chartered accountant before acting.
Frequently asked questions
Common questions about tax and this guide.
What is the TDS threshold on FD interest in 2026?
For FY 2025-26 onwards, the threshold is generally ₹50,000 for non-senior depositors and ₹1,00,000 for senior citizens, per bank per financial year. Confirm the current limit before relying on it.
Is TDS on FD interest 10% or 20%?
It is generally 10% if your PAN is furnished to the bank. If PAN is not available or is invalid, the rate can be 20%. Higher rates may apply in specific non-compliance cases.
Can I avoid TDS by submitting Form 15G?
Form 15G can prevent TDS if you are below 60 and your total income is below the taxable limit. Form 15H serves a similar purpose for senior citizens. The declaration must be true and is usually valid for one financial year.
Do I need to pay tax if TDS was deducted?
TDS is only an advance payment. Your actual tax depends on your total income and slab. If TDS is higher than your liability, you can claim a refund; if it is lower, you pay the balance when filing.
Is FD interest taxable if no TDS was deducted?
Yes. Interest is taxable at your slab rate whether or not TDS was deducted. The threshold only determines whether the bank must deduct TDS, not whether the income is taxable.
Can I claim a refund if my income is below the taxable limit?
Yes. File your return, report the interest income and claim credit for the TDS deducted. If the tax paid exceeds your liability, the department processes a refund after verification.
Editorial note: This article was written and reviewed by the FinCalc Bharat Editorial Team. It is educational content, not investment, tax, insurance or legal advice. Mutual fund and insurance products carry risk; read the scheme or policy documents before investing.
Tax rates, thresholds and scheme rules can change. Verify the current rules on the official sources linked above or consult a qualified professional before making a decision.