TDS (Tax Deducted at Source) is a tax collection mechanism where the payer deducts tax before making payment to the recipient. The deducted tax is deposited with the government. The recipient gets credit for TDS in their ITR. Common examples: employer deducting TDS on salary (Section 192), bank deducting TDS on FD interest (Section 194A).
What is the TDS threshold for FD interest?▼
TDS on FD interest (Section 194A) is deducted when annual interest exceeds ₹40,000 (₹50,000 for senior citizens). If your total annual FD interest from one bank is below this threshold, no TDS is deducted. Submit Form 15G (non-senior) or Form 15H (senior) if your total income is below taxable limit to avoid TDS entirely.
How to avoid TDS deduction?▼
Submit Form 15G (below 60 years) or Form 15H (60+ years) to your bank/payer at the start of each financial year if your estimated income is below the basic exemption limit. This prevents TDS deduction. Note: Submitting false declarations is a punishable offense under Section 277 of Income Tax Act.