Section 194A · TDS on interest other than interest on securities
Why your bank cuts TDS on fixed deposit interest.
- Rate
- 10% (higher if no PAN)
- Banks / co-op / PO (FY 2025-26)
- ₹50,000 (₹1,00,000 senior)
- Other payers
- ₹10,000
- Form 15G/15H
- Only if prescribed conditions met
In plain English
When a bank, co-operative bank or post office pays you interest, for FY 2025-26 it deducts TDS only once your interest crosses ₹50,000 a year (₹1,00,000 if you're a senior citizen). For other payers, like companies, the limit is ₹10,000. Form 15G / 15H can stop the deduction only where the prescribed nil-tax and eligibility conditions are met.
| Meaning | Number |
|---|---|
| Rate | 10% (higher if no PAN) |
| Banks / co-op / PO (FY 2025-26) | ₹50,000 (₹1,00,000 senior) |
| Other payers | ₹10,000 |
Common payments covered by 194A
- Bank / co-op bank / post-office interest — ₹50,000 (₹1,00,000 senior) — FY 2025-26
- Interest from other payers — ₹10,000 — FY 2025-26
- Form 15G / 15H — Only where prescribed conditions are met
- NOT covered — Savings-account interest (80TTA / 80TTB)
What this section covers
Section 194A applies to interest other than interest on securities paid to residents. For FY 2025-26 the thresholds are ₹50,000 for interest from banks, co-operative banking societies and post offices (₹1,00,000 for resident senior citizens), and ₹10,000 in other cases. This is a threshold, not a blanket bank exemption. Form 15G / 15H can be furnished only where the prescribed nil-tax and eligibility conditions are met. (Before 1 Apr 2025 the bank threshold was ₹40,000 / ₹50,000 senior.)
Read the legal text
“Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income by way of interest on securities, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof… deduct income-tax thereon at the rates in force.”
Old Act vs New Act
| Aspect | Act, 1961 | Act, 2025 |
|---|---|---|
| Section | 194A | 393 |
| Topic | TDS on interest other than interest on securities | |
| Verdict | Consolidated under Section 393 — thresholds reviewed | |
| Notes | Under the Income-tax Act, 2025 this TDS is part of the consolidated Section 393 (Section 393(1) Table Sl. 5(ii)/(iii)). The FY 2025-26 thresholds were set under the 1961 Act — not first introduced by the 2025 Act. | |
Common confusion
The bank threshold is counted per payer across branches, not per FD. Savings-account interest is outside 194A and relates to 80TTA / 80TTB.
Who should know this
Related sections
Based on the official Income-tax Act, 1961 and the published Income-tax Act, 2025 as available on the Income Tax Department website. Always verify against the published Act and consult a qualified professional.
What was checked
194A → 393(1) Table Sl. 5(ii)/(iii): FY 2025-26 (1961 Act) thresholds only. Table row checked against s.393 (current text). TDS rates & thresholds — FY 2025-26 (TRACES)
Related official updates