๐๏ธ TDS on Interest Calculator
Section 194A, FY 2025-26 thresholds and rates.
TDS deducted
Estimates for planning only, not financial advice.
Earn โน80,000 in bank FD interest in FY 2025-26 and the bank deducts 10 percent TDS: โน8,000, leaving you โน72,000. The threshold is โน50,000 for general depositors and โน1,00,000 for senior citizens, both raised by the Finance Act 2025. Below the threshold, no TDS, but the interest is still fully taxable.
How to Use This Calculator
Enter your total interest income for the financial year from one payer category, select the payer type and senior-citizen status, and indicate whether your PAN is on record. The calculator applies the FY 2025-26 Section 194A rules.
Enter interest per payer. Thresholds apply per payer per year, not across all your deposits combined.
Pick payer type: banks, co-operative banks, and post offices share the โน50,000/โน1,00,000 thresholds; company deposits use โน10,000.
Check PAN status. No PAN means 20 percent TDS instead of 10, so keeping PAN updated is the cheapest tax planning there is.
The Rules (FY 2025-26)
The Finance Act 2025 raised every 194A threshold from April 1, 2025: general bank interest โน40,000 to โน50,000, senior citizens โน50,000 to โน1,00,000, and other payers โน5,000 to โน10,000. Crucially, once interest crosses the threshold, TDS applies to the whole amount, not just the excess. And no TDS never means no tax: interest below the threshold is still taxable at your slab rate.
Worked Example
General depositor, โน80,000 bank FD interest, PAN furnished. Threshold โน50,000: exceeded, so TDS = 10 percent x 80,000 = โน8,000. You receive โน72,000; the โน8,000 appears in your Form 26AS/AIS as tax credit. A senior citizen with โน90,000 interest: threshold โน1,00,000, not exceeded, zero TDS, but the โน90,000 is still taxable income (offset partly by the โน50,000 80TTB deduction for seniors). No PAN on the โน80,000 case: TDS doubles to โน16,000.
Avoiding TDS Legally
If your total income is below the taxable limit, submit Form 15G (15H for seniors) to the bank and no TDS is deducted at all. Split deposits across banks only helps within the rules if each bank's interest stays under its threshold, since thresholds are per payer. Timing matters too: cumulative FDs accrue interest yearly for TDS even though cash arrives at maturity, so plan the deposit date. And never skip reporting interest just because no TDS was cut; the AIS already told the tax department.
TDS vs Actual Tax
TDS is advance tax, not final tax. If your slab rate is 30 percent, the 10 percent TDS leaves 20 percent more payable; if you owe no tax, claim the TDS back as a refund in your ITR. Reconcile every year: download Form 26AS and AIS, match each TDS entry to your interest income, and report interest on accrual basis to match what banks report. Mismatches between your ITR and the AIS are the single most common trigger for automated notices.
Form 15G/15H: Stopping TDS Legally
TDS is not extra tax; it is advance tax, adjustable against your final liability. If your total income is below the taxable threshold, you can file Form 15G (under 60) or 15H (senior citizens) with the bank to stop TDS entirely. The forms are declarations that your estimated total income is nil-taxable; file them at the start of the financial year, separately with each bank branch where you hold deposits.
Two cautions. First, filing a false declaration is punishable: if your income actually exceeds the threshold, the TDS you dodged becomes tax due plus interest under Sections 234B and 234C. Second, TDS avoided is not tax avoided: even with no TDS, interest income above โน10,000 (โน50,000 for seniors) must be reported, and tax paid via advance tax or self-assessment. Use the forms to fix cash flow timing, never to hide income.
TDS Is Collection, Not Taxation
The single most misunderstood fact about TDS: it is not your tax. It is the government's advance collection, adjustable at filing time against your actual slab liability. If TDS exceeded what you owe, the excess comes back as a refund with interest; if it fell short, you pay the balance as advance or self-assessment tax. Form 26AS and the AIS reconcile every rupee deducted against your PAN, so verify the credits before filing: missing TDS credits are the most common reason refunds get delayed.
Plan around the thresholds rather than fearing them. Splitting deposits across banks does not avoid TDS legally if aggregate interest crosses limits per payer rules, but timing fixed-deposit renewals across financial years can keep annual interest under the threshold honestly. Senior citizens should file 15H proactively every April instead of fighting for refunds later. And remember the post-2025 thresholds (โน50,000 general, โน1,00,000 for seniors): more interest now escapes TDS, which means more taxpayers must pay advance tax themselves. The deduction got lighter; the liability did not.
Estimates for planning only, not financial advice.
Frequently Asked Questions
What is the TDS threshold on FD interest for FY 2025-26?
โน50,000 per year for bank, co-operative bank, and post office interest (general depositors), โน1,00,000 for senior citizens, and โน10,000 for other payers like company deposits. All thresholds were raised by the Finance Act 2025 effective April 1, 2025. The thresholds apply per payer per person, so splitting deposits across banks does not multiply the threshold, though many depositors misunderstand this.
What is the TDS rate on interest?
10 percent when PAN is furnished, 20 percent without PAN. No surcharge or cess is added. Once interest crosses the threshold, TDS applies to the entire interest amount, not just the excess over the threshold. Furnishing PAN is the cheapest tax move in India: it halves the rate instantly, and without it you also face compliance headaches reclaiming the excess.
Is savings account interest subject to TDS?
No. Section 194A does not apply to savings bank account interest; banks never deduct TDS on it. It is still taxable, though general taxpayers get a โน10,000 deduction under 80TTA and seniors get โน50,000 under 80TTB. Do not confuse no-TDS with no-tax: savings interest above the deduction must be declared in your ITR, and the AIS will show it.
How can I avoid TDS on my FD interest?
Submit Form 15G (or 15H if you are a senior citizen) to the bank if your total income is below the taxable limit. Keep deposits per bank under the threshold where practical, and ensure your PAN is always updated to avoid the 20 percent rate.
Do senior citizens get a higher TDS threshold?
Yes: โน1,00,000 per year on bank/post office interest for FY 2025-26, double the general โน50,000. Seniors also get the โน50,000 80TTB deduction on interest income, which often wipes out the tax on moderate FD interest entirely. A senior with โน60,000 of FD interest and no other income typically owes no tax and suffers no TDS: the system is designed to leave retirees' interest alone.
Is interest below the TDS threshold tax-free?
No, this is the costliest misconception in the section. No TDS just means no deduction at source; the interest is fully taxable at your slab rate and must be reported. The tax department sees it in your AIS whether or not TDS was cut.
When is TDS deducted on cumulative FDs?
Yearly on accrual basis, even though you receive nothing until maturity. The bank credits notional interest each year, deducts TDS on it, and reports it to your AIS. Report the same accrual figures in your ITR to avoid mismatches. The mismatch trap: taxpayers who report cumulative FD interest only at maturity get AIS notices for the earlier years, since the bank already reported it annually.
What if my bank deducted TDS but I owe no tax?
Claim it as a refund when you file your income tax return. The TDS sits as a credit in your Form 26AS; the ITR reconciles it against your actual liability and refunds the excess. File even if your income is below the basic exemption, to get the refund.
Does the threshold apply per bank or totally?
Per payer per financial year. โน45,000 interest each at two different banks means no TDS at either (each below โน50,000), though the combined โน90,000 is fully taxable. Deliberate splitting purely to dodge TDS across branches of the same bank does not work; branches aggregate.
What is Form 15G vs 15H?
Both declare that your total income is below the taxable limit so no TDS should be deducted. 15G is for general individuals and HUFs below 60; 15H is for senior citizens. Submit to each payer every financial year before interest crosses the threshold.