Income Tax on FD Interest — Form 15G and Form 15H Guide

Interest earned on fixed deposits (FDs), recurring deposits and savings accounts above a threshold is subject to TDS under Section 194A of the Income Tax Act. If your total income is below the taxable limit, you can avoid TDS by submitting Form 15G (for non-senior citizens) or Form 15H (for senior citizens) to your bank. Here is the complete guide.

TDS on FD Interest — Section 194A

• TDS rate: 10% (if PAN is provided); 20% (if PAN is not provided)
• Threshold for TDS by banks: Interest exceeding ₹40,000 per year from a bank (bank branches are treated as one bank — all FDs in all branches of the same bank are clubbed)
• Senior citizens (60+): Higher threshold of ₹50,000 per year from a bank
• Post Office deposits: Same ₹40,000/₹50,000 threshold
• Co-operative banks: Same threshold (after 2019 amendment — previously ₹10,000)

Form 15G — For Non-Senior Citizens

• A declaration that your total taxable income does not exceed the basic exemption limit (₹2.5 lakh for AY 2025-26; ₹3 lakh under new regime)
• AND estimated interest income does not exceed the basic exemption limit
• Who can submit: Individuals and HUFs below 60 years of age whose total income (including FD interest) is below the exemption limit
• Form 15G is a self-declaration — you can be prosecuted if the declaration is false

Form 15H — For Senior Citizens (60+)

• Available for any senior citizen (60+ years) who has nil tax liability for the assessment year — regardless of total income amount
• Condition: Tax on estimated total income is nil (after claiming all deductions, rebates etc.) — total income can be above ₹2.5 lakh
• Super senior citizens (80+): Can submit Form 15H even if total income is above ₹5 lakh, as long as tax liability after deductions is zero

When and How to Submit

• Submit at the beginning of each financial year (April 1) — must be renewed every year
• Submit to all banks where you have FDs — each bank separately
• Most banks accept online submission through net banking / bank mobile app
• The bank is relieved of TDS obligation once a valid Form 15G/15H is on record for the year

Conclusion

Form 15G and 15H are powerful tools to avoid unnecessary TDS on FD interest — but must be submitted every year before the interest is credited. SPOTON provides ITR filing, Form 15G/15H advisory and TDS refund assistance for individuals and senior citizens in Kerala. Contact us for expert income tax compliance services.