When is TDS deducted on interest under 194A?
When TDS is deducted on interest other than interest on securities, who the deductor is, why bank and post-office thresholds differ from other payers, the senior-citizen bank limit on the Department's own help page, and how section 194A now reads under section 393 of the Income-tax Act, 2025.
In this guide
A person who pays a resident interest other than interest on securities deducts TDS once that interest in the year crosses the threshold for that payer. Banks, co-operative banks and post offices have a higher threshold than other payers, and a resident senior citizen has a higher bank threshold still. Deduction is at credit or payment, whichever is earlier. From 1 April 2026 the 194A deduction sits in section 393 of the Income-tax Act, 2025.
What interest does section 194A tax?
Section 194A is TDS on interest other than interest on securities, paid to a resident. Bank fixed-deposit interest is the case most people meet. Interest on securities is outside this section. The deduction runs on the interest credited or paid, not on the deposit principal.
It was section 194A of the Income-tax Act, 1961. From 1 April 2026 the same deduction sits within the consolidated deduction section, section 393 of the Income-tax Act, 2025. The e-Filing TDS compliance FAQ says the rates and monetary thresholds were retained; the section number changed.
Who deducts TDS on interest?
The person responsible for paying the interest deducts under section 194A. An individual or Hindu undivided family is outside that duty unless that person is required to get accounts audited. A company, firm, co-operative society, bank or post office is in. The payee has to be a resident. Interest paid to a non-resident is a different deduction.
Why does the 194A threshold vary?
There is no single rupee line for all 194A interest. A banking company, a co-operative society carrying on banking, and a post office sit on a higher threshold than other payers. A resident senior citizen sits on a higher bank threshold than other individuals. Finance Acts have moved these rupee figures more than once.
What can be cited from an official help page, as it stood when this guide was verified, is narrower. The Department's senior-citizen help page (reviewed 29 May 2026, for AY 2026-27) states that under section 194A no TDS is deducted on interest up to ₹50,000 paid by a bank, post office or co-operative bank to a senior citizen, and that this limit is computed for every bank individually. That is a per-payer test, not an all-India total across banks.
Is the 194A limit per bank?
Yes, on the Department help page for a senior citizen. Each bank, post office or co-operative bank tests its own interest against ₹50,000. Two banks do not add their interest together for that test.
Is 80TTB the same as the 194A threshold?
No. Section 80TTB is a deduction in the senior citizen's return, up to ₹50,000 of interest from banks, post offices and co-operative banks. A payer still deducts under 194A unless a valid Form 15G or 15H is on file.
| Point | Position |
|---|---|
| Kind of income | Interest other than interest on securities, to a resident |
| When deducted | Credit or payment, whichever is earlier |
| Who has the higher threshold | Bank, co-operative bank, post office; higher again for a senior citizen |
| Senior citizen, per bank, on the Department help page | No TDS up to ₹50,000 per bank, post office or co-operative bank |
| Other rupee limits | Confirm the current non-senior and non-bank rupee limits in section 393. Finance Acts have moved those figures. |
Section 80TTB is a deduction in the senior citizen's return, up to ₹50,000 of interest from banks, post offices and co-operative banks. It is not the TDS threshold, even though the two rupee figures currently match on that help page. A payer deducts under 194A unless a valid declaration is on file; the payee claims 80TTB later.
When is 194A interest TDS deducted?
Deduction under section 194A is at the time of credit of the interest to the payee's account, or at the time of payment, whichever is earlier. Credit in the books, including a "payable" account, is enough. Waiting for the deposit to mature does not delay the deduction once interest has been credited.
Through 31 March 2026 that trigger is read under the 1961 Act. From 1 April 2026 it is read under the 2025 Act. The e-Filing FAQ is explicit: if interest is credited on 31 March 2026 and paid in April, the 1961 Act still governs, because credit came first.
Where does 194A sit after 2026?
From 1 April 2026, quote section 393 in the TDS return for a 194A credit or payment on or after that date. Quoting 194A after that date is the processing error the FAQ warns about. The substance of the interest deduction is the same; the label in the return is not.
Do I still use Form 15G after April 2026?
Yes. A resident individual who wants the payer not to deduct, because estimated total income is below the taxable limit, still uses a declaration: Form 15G, or Form 15H if 60 or older. That workflow is in the Form 15G / 15H guide. From tax year 2026-27 those declarations are renamed under the 2025 Act; the idea is unchanged.
How do I confirm a 194A deduction?
- Read section 393 for a credit or payment on or after 1 April 2026, and the 1961 section 194A text for anything earlier.
- Confirm the current rupee threshold for that payer and that payee in the section. Use the Department senior-citizen help page only for the per-bank senior-citizen figure it currently states.
- Deduct at credit or payment, whichever is earlier. Do not wait for maturity once interest has been credited.
- Watch CBDT / Income Tax updates for any change to the threshold or the return mapping.
Why does bank interest TDS go wrong?
- Adding interest across two banks and deducting, or not deducting, as if there were one threshold. The Department help page treats the senior-citizen bank limit as per bank.
- Treating the 80TTB deduction in the return as a reason for the bank not to deduct.
- Waiting until the deposit matures when interest has already been credited in the books.
- Quoting section 194A in a TDS return for a credit or payment on or after 1 April 2026, instead of section 393.
Where do 194A threshold changes appear?
Bank and post-office 194A thresholds, and the Form 15G / 15H path that stops a deduction, move through CBDT circulars and e-Filing notes. Complied AI keeps CBDT / Income Tax updates in one feed so you can open the source behind a change. When the question is FD interest credited on or after 1 April 2026, open the interest-other-than-securities row of section 393 next to that update, not a remembered 194A number from an earlier year.
Practical checks
Common questions
Is TDS deducted on all interest I earn?
No. Section 194A covers interest other than interest on securities, paid to a resident. Interest on securities is a different deduction. Saving-bank and fixed-deposit interest at a bank is the usual 194A case. Deduction starts once that interest with that payer in the year crosses the threshold for that payer. From 1 April 2026 quote section 393, not 194A, on the TDS return.
Does every bank use the same 194A threshold for me?
No. The threshold is computed for each payer separately. The Income Tax Department senior-citizen help page, reviewed 29 May 2026 for AY 2026-27, states that a bank, post office or co-operative bank does not deduct TDS on interest up to ₹50,000 paid to a senior citizen, and that this limit is computed for every bank individually. Interest at two banks is not added together for that test.
Can I stop my bank deducting TDS on FD interest?
Yes, if you are a resident individual whose estimated total income is below the taxable limit. Give the payer a declaration in Form 15G, or Form 15H if you are 60 or older, so that the payer does not deduct. That path is in the Form 15G / 15H guide. It does not change the payer's duty where no valid declaration is on file.
My bank credited FD interest on 31 March and paid it in April. Which Act applies?
The 1961 Act. Deduction under section 194A is at credit or payment, whichever is earlier. The e-Filing TDS-compliance FAQ is explicit: if interest is credited on 31 March 2026 and paid in April, the 1961 Act still governs, because credit came first. Quoting section 393 on that line is the processing error the FAQ warns about.
Is the 80TTB deduction a reason for my bank not to deduct 194A?
No. Section 80TTB is a deduction in the senior citizen's return, up to ₹50,000 of interest from banks, post offices and co-operative banks. It is not the TDS threshold, even though the two rupee figures currently match on the Department help page. A payer deducts under 194A unless a valid Form 15G or 15H is on file; the payee claims 80TTB later.
Which section do I quote for April 2026 FD interest?
Section 393 of the Income-tax Act, 2025, on the interest-other-than-securities row. From 1 April 2026 the deduction that was section 194A of the 1961 Act reads inside that consolidated table. The e-Filing TDS-compliance FAQ says rates and monetary thresholds were retained; the section number changed. Quote 393, not 194A, on a credit or payment on or after that date.
I have FDs at two banks. Do they add my interest together?
No. The Department help page treats the senior-citizen bank limit as per bank, post office or co-operative bank. Each payer tests its own interest against its own threshold. Adding two banks together and then deducting, or not deducting, as if there were one all-India line is the usual 194A error.
Publication method
How this guide was prepared
This guide is published by the Complied AI research desk. Its source list and stated position were checked against the official records shown below on 30 August 2026.
Automation, including AI, may assist research, drafting and structure. It does not replace the official record or amount to an independent professional review. Read our editorial standards and corrections policy.
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Official sources used
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