Fixed Deposit Limits in FY 2025 -26 and Reporting in ITR
Fixed Deposit Limits in FY 2025 -26 for Senior Citizens and Others
Meaning of Senior Citizen
Senior Citizen: An individual, resident in India, who is 60 years or more but less than 80 years at any time during the previous year
Very Senior Citizen: An individual, resident in India, who is 80 years or more at any time during the previous year.
Example 1: If an individual turns 60 on July 15, 2025, they are considered a senior citizen for the entire financial year 2025-26
Example 2: If an individual is 79 years old during the financial year 2025-26, they are considered a senior citizen
Example 3: If an individual turns 80 on November 20, 2025, they are considered a very senior citizen for the financial year 2025-26.
Example 4: If an individual is 59 years old during the entire financial year 2025-26, they are not considered a senior citizen.
Threshold limits for TDS deduction on Fixed Deposit interest for senior citizens and others
For the financial year 2025-26, the Finance Bill 2025 proposes the following threshold limits for TDS on interest earned on Fixed Deposits (FD):
| Section | Payer | FY 2024-25 (AY 2025-26) | FY 2025-26 AY 2026-27) |
|---|---|---|---|
| 194A | Banking company or Co-operative Bank or Co-operative society or Post office (Senior Citizen) | ₹ 50,000 | ₹ 1,00,000 |
| 194A | Banking company or Co-operative Bank or Co-operative society or Post office (Resident other than Senior citizen) | ₹ 40,000 | ₹ 50,000 |
| 194A | Any other case | ₹ 5,000 | ₹ 10,000 |
These changes are scheduled to take effect from April 1, 2025.
Example
To calculate the TDS (Tax Deducted at Source) amount, the TDS rates are needed.
- TDS rates depend on the recipient’s (deductee) PAN (Permanent Account Number) status and other factors.
- If the recipient provides their PAN, TDS is deducted at the rates specified in the Income Tax Act.
- If the recipient does not provide their PAN, TDS is deducted at a higher rate.
TDS on FDR interest when PAN status is available and active
| Scenario | Category | FD Amount (₹) | Interest Rate | Interest Earned (₹) from 01.04.2025 to 31.03.2026 | TDS Applicable? | TDS Rate (Illustrative) | TDS Amount (₹) (Illustrative) |
|---|---|---|---|---|---|---|---|
| 1 | Senior Citizen | 20,00,000 | 8% | 1,60,000 | Yes | 10% | 16,000 |
| 2 | Senior Citizen | 10,00,000 | 8% | 80,000 | No | N/A | 0 |
| 3 | Other Individual | 5,00,000 | 8% | 40,000 | No | N/A | 0 |
| 4 | Other Individual | 7,00,000 | 8% | 56,000 | Yes | 10% | 5,600 |
Key points to consider:
- Senior Citizen Threshold: For senior citizens, no TDS will be deducted if the interest income from FDs across all banks/post offices does not exceed ₹ 1,00,000 during the financial year.
- Other Individual Threshold: For individuals who are not senior citizens, no TDS will be deducted if the interest income from FDs with a banking company, co-operative bank, co-operative society, or post office does not exceed ₹ 50,000 during the financial year. For interest other than from the sources specified in Section 194A, no TDS will be deducted if the interest income does not exceed ₹ 10,000.
- TDS Deduction: If the interest earned exceeds the respective threshold, TDS will be deducted by the bank or financial institution as per the applicable rates.
- Illustrative TDS Rate: The TDS rate of 10% is used for illustration purposes only. The actual TDS rate may vary based on the individual’s specific circumstances and the applicable income tax laws.
Explanation of Scenarios:
- Scenario 1: A senior citizen earns ₹ 1,60,000 in interest, which exceeds the ₹ 1,00,000 threshold. TDS is applicable. Assuming a 10% TDS rate, the TDS amount would be ₹ 16,000.
- Scenario 2: A senior citizen earns ₹ 80,000 in interest, which is below the ₹ 1,00,000 threshold. No TDS will be deducted.
- Scenario 3: An individual (not a senior citizen) earns ₹ 40,000 interest. As the interest income does not exceed ₹ 50,000, no TDS will be deducted.
- Scenario 4: An individual (not a senior citizen) earns ₹ 56,000 in interest, exceeding the ₹ 50,000 threshold. TDS is applicable. Assuming a 10% TDS rate, the TDS amount would be ₹ 5,600.
TDS on FDR interest when PAN is not available or is inactive:
Here are some examples illustrating the TDS implications on Fixed Deposit (FD) interest when PAN is not available or is inactive, based on the scenario that the rate in force is 10% and the TDS rate as per section 206AA is 20% as indicated by the sources and our conversation history:
| Scenario | Category | FD Amount (₹) | Interest Rate | Interest Earned (₹) | PAN Available/ Active? | TDS Rate | TDS Amount (₹) |
|---|---|---|---|---|---|---|---|
| 1 | Senior Citizen | 20,00,000 | 8% | 1,60,000 | PAN Not Available | 20% (Higher of 10% ‘rate in force’ or 20% as per section 206AA) | 32,000 |
| 2 | Other Individual | 7,00,000 | 8% | 56,000 | PAN Not Available | 20% (Higher of 10% ‘rate in force’ or 20% as per section 206AA) | 11,200 |
| 3 | Senior Citizen | 20,00,000 | 8% | 1,60,000 | PAN Availbale but Inoperative (not linked with Aadhaar) | 20% (Higher of 10% ‘rate in force’ or 20% as per section 206AA) | 32,000 |
| 4 | Other Individual | 7,00,000 | 8% | 56,000 | PAN Availbale but Inoperative (not linked with Aadhaar | 20% (Higher of 10% ‘rate in force’ or 20% as per section 206AA) | 11,200 |
Key points to consider:
- Higher TDS Rate: If the recipient does not furnish their PAN, tax is deducted at a higher rate. As per Section 206AA, the tax shall be deducted at the higher of the applicable rate, the rate in force, or 20%. Since the rate in force is 10% and the TDS rate as per section 206AA is 20%, 20% will be applicable.
- Section 206AA: The provisions of section 206AA of the Income-tax Act, which requires obtaining or furnishing PAN, will still apply.
- PAN Inoperative: If the PAN is inoperative as per Section 139AA of the Act due to non-linkage of Aadhar, the higher rate as per Section 206AA of the Act will still be applicable. The specific rate will depend on the provisions of Section 206AA.
- The deductor/collector does not need to ascertain whether a return has been filed or not by the deductee/collectee.
Explanation of Scenarios:
- Scenario 1: A senior citizen earns ₹ 1,60,000 in interest, exceeding the proposed ₹ 1,00,000 threshold. Because PAN is not available, TDS is applicable at 20% (higher of the applicable rate or 20%).
- Scenario 2: An individual (not a senior citizen) earns ₹ 56,000 in interest, exceeding the proposed ₹ 50,000 threshold. Because PAN is not available, TDS is applicable at 20% (higher of the applicable rate or 20%).
- Scenario 3: A senior citizen earns ₹ 1,60,000 in interest, exceeding the proposed ₹ 1,00,000 threshold. Because PAN is inoperative, TDS is applicable at 20% as per Section 206AA (higher of the applicable rate or 20%).
- Scenario 4: An individual (not a senior citizen) earns ₹ 56,000 in interest, exceeding the proposed ₹ 50,000 threshold. Because PAN is inoperative, TDS is applicable at 20% as per Section 206AA (higher of the applicable rate or 20%).
FDR in Different Banks : TDS Rate of FDR Interest
Scenario:
- Mr. S (Senior Citizen)
- ₹ 10,00,000 FDR in ICICI Bank
- ₹ 10,00,000 FDR in SBI Bank
- Mr. A (Age 59)
- ₹ 10,00,000 FDR in ICICI Bank
- ₹ 10,00,000 FDR in SBI Bank
Assumptions:
- PAN is available for both Mr. S and Mr. A
- Interest rate: 8%
- TDS thresholds are as proposed in the Finance Bill 2025
- Rate in force: 10%
TDS Thresholds (as per Finance Bill 2025):
- Senior Citizens: ₹ 1,00,000 when the payer is a bank, cooperative society, or post office
- Other Individuals: ₹ 50,000 when the payer is a bank, cooperative society, or post office
TDS Implications Table:
| Category | Bank | FD Amount (₹) | Interest Rate | Interest Earned (₹) in FY 2025-26 | TDS Threshold (₹) | TDS Applicable? | TDS Amount (₹) |
|---|---|---|---|---|---|---|---|
| Mr. S (Senior Citizen) | ICICI | 10,00,000 | 8% | 80,000 | 1,00,000 | No | 0 |
| Mr. S (Senior Citizen) | SBI | 10,00,000 | 8% | 80,000 | 1,00,000 | No | 0 |
| Mr. A (Age 59) | ICICI | 10,00,000 | 8% | 80,000 | 50,000 | Yes | 8,000 |
| Mr. A (Age 59) | SBI | 10,00,000 | 8% | 80,000 | 50,000 | Yes | 8,000 |
Explanation:
- Mr. S (Senior Citizen): Since the interest earned (₹ 80,000) from both ICICI and SBI is less than the ₹ 1,00,000 threshold for senior citizens, no TDS is deducted
- Mr. A (Age 59): The interest earned (₹ 80,000) from both ICICI and SBI exceeds the ₹ 50,000 threshold for individuals who are not senior citizens; therefore, TDS is applicable The TDS amount is calculated as 10% of ₹80,000, which equals ₹8,000.
Additional Points for Mr. A:
- TDS Rate: The TDS is deducted at the rate of 10% (‘rate in force’) since PAN is available
- Section 194A: This section of the Income-tax Act covers interest income other than interest on securities.
Submission of Form 15G/15H to avoid TDS deduction
Key Points on Form 15G/15H
- Form 15G: This declaration is for individuals (other than companies or firms).
- Form 15H: This declaration is specifically for resident individuals in India who are 60 years or older at any time during the previous year and whose income is below the taxable limit, allowing them to declare that their estimated total income will be nil
Scenario
To illustrate the submission of Form 15G/15H and its impact on TDS, consider the following individuals with fixed deposits:
- Mr. S (Senior Citizen, 70 years old)
- Mr. A (Age 59)
Assumptions
- Both have fixed deposits in a bank.
- Both anticipate that their total income for the financial year will be below the taxable limit.
- Interest income from fixed deposits is the primary income under consideration for TDS.
- TDS thresholds are as proposed in the Finance Bill 2025.
- Rate in force: 10%
TDS Thresholds (as per Finance Bill 2025)
- Senior Citizens: ₹ 1,00,000 when the payer is a bank, cooperative society, or post office.
- Other Individuals: ₹ 50,000 when the payer is a bank, cooperative society, or post office.
Impact of Form 15G/15H Submission
Category | Age | Fixed Deposit Interest Income (₹) | TDS Threshold (₹) | Form to Submit | TDS Applicable if Form NOT Submitted? | TDS if Form Submitted? |
Mr. S (Senior Citizen) | 70 | 80,000 | 1,00,000 | Form 15H | No | No |
Mr. A (Other Individual) | 59 | 80,000 | 50,000 | Form 15G | Yes | No |
Explanation
- Mr. S (Senior Citizen):
- Since Mr. S is a senior citizen and his interest income (₹ 80,000) is below the ₹ 1,00,000 threshold, TDS is not applicable.
- Even if TDS was applicable he can submit Form 15H. By submitting Form 15H, Mr. S declares that his total income is below the taxable limit, and no TDS will be deducted.
- Mr. A (Other Individual):
- Mr. A’s interest income (₹ 80,000) exceeds the ₹ 50,000 threshold, making TDS applicable.
- However, if Mr. A submits Form 15G, declaring that his total income is below the taxable limit, no TDS will be deducted.
Process and Requirements
- Eligibility:
- Assess if total income is below the basic exemption limit.
- Declaration:
- Furnish declaration in Form No. 15G and Form No. 15H.
- Allotment of Identification Number:
- The person responsible for paying any income should allot a unique identification number to each declaration received in Form No.15G and Form No.15H during every quarter of the financial year.
- Furnishing Particulars:
- The person referred to in sub-rule (3) shall furnish the particulars of declaration received by him during any quarter of the financial year along with the unique identification number allotted by him under sub-rule (3) in the statement of deduction of tax of the said quarter in accordance with the provisions of clause (vii) of sub-rule (4) of rule 31A.
- Verification:
- The person referred to in sub-rule (3) shall furnish the statement of deduction of tax referred to in rule 31A containing the particulars of declaration received by him during each quarter of the financial year along with the unique identification number allotted by him under sub-rule (3) in accordance with the provisions of clause (vii) of the sub-rule (4) of rule 31A irrespective of the fact that no tax has been deducted in the said quarter.
- Online Submission:
- Declarations can be submitted electronically after verification.
Important Considerations
- Accuracy: It is crucial to accurately assess income and eligibility before submitting these forms.
- False Declaration: Submitting a false declaration can result in penalties.
When Senior citizen can submit Form 15H for AY 2026-27.
Scenario: Senior citizen (61 years), pension income ₹ 6,00,000, interest income (FDR) ₹ 5,00,000, total income ₹ 11,00,000, opting for the new tax regime.
| Category | Details | Amount (₹) |
|---|---|---|
| 1. Income | ||
| Pension Income | 6,00,000 | |
| Interest Income (FDR) | 5,00,000 | |
| Total Income | 11,00,000 | |
| 2. Deductions | ||
| Standard Deduction (New Regime) | 75,000 | |
| Income After Standard Deduction | 10,25,000 | |
| 3. Tax Calculation (Before Rebate) | (Based on New Tax Regime Slabs) | |
| Tax on income up to ₹ 4,00,000 | Nil | 0 |
| Tax on income from ₹ 4,00,001 to ₹ 8,00,000 (5%) | (₹ 4,00,000 * 0.05) | 20,000 |
| Tax on income from ₹ 8,00,001 to ₹ 10,25,000 (10%) | (₹ 2,25,000 * 0.10) | 22,500 |
| Total Tax Liability (Before Rebate) | 42,500 | |
| 4. Rebate under Section 87A | Maximum rebate is ₹ 60,000 but limited to tax liability | |
| Rebate Amount | Since tax liability (₹ 42,500) < ₹ 60,000 | 42,500 |
| 5. Final Tax Liability | After Rebate | 0 |
| 6. Form 15H Eligibility | Tax liability is nil, meets age criteria | Eligible |
Conclusion: Since the senior citizen’s final tax liability is nil after considering the standard deduction and the rebate under Section 87A, they are eligible to submit Form 15H
When citizen can not submit Form 15G for AY 2026-27.
Scenario: Citizen (58 years), salary income ₹ 6,00,000, interest income (FDR) ₹ 5,00,000, total income ₹ 11,00,000, opting for the new tax regime.
| Category | Details | Amount (₹) |
|---|---|---|
| 1. Income | ||
| Salary Income | 6,00,000 | |
| Interest Income (FDR) | 5,00,000 | |
| Total Income | 11,00,000 | |
| 2. Deductions | ||
| Standard Deduction (New Regime) | 75,000 | |
| Income After Standard Deduction | 10,25,000 | |
| 3. Tax Calculation (Before Rebate) | (Based on New Tax Regime Slabs) | |
| Tax on income up to ₹ 4,00,000 | Nil | 0 |
| Tax on income from ₹ 4,00,001 to ₹ 8,00,000 (5%) | (₹ 4,00,000 * 0.05) | 20,000 |
| Tax on income from ₹ 8,00,001 to ₹ 10,25,000 (10%) | (₹ 2,25,000 * 0.10) | 22,500 |
| Total Tax Liability (Before Rebate) | 42,500 | |
| 4. Rebate under Section 87A | Maximum rebate is ₹ 60,000 but limited to tax liability | |
| Rebate Amount | Since tax liability (₹ 42,500) < ₹ 60,000 | 42,500 |
| 5. Final Tax Liability | After Rebate | 0 |
| 6. Form 15G Eligibility | Tax liability is nil and age is below 60 | Not Eligible* |
*If the interest income (FDR) is ₹ 5,00,000, and this amount exceeds the maximum amount not chargeable to income tax based on the individual’s age bracket (₹4,00,000 ) under New regime he can not file Form 15G
section 197A(1B) “The provisions of this section shall not apply where the amount of any income of the nature referred to in sub-section (1) or sub-section (1A), as the case may be, or the aggregate of the amounts of such incomes credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the maximum amount which is not chargeable to income-tax.]
Taxation of FD Interest Income
1. Head of Income:
- Interest earned from FDs is considered Income from Other Sources. This is a specific category in the Income Tax Return (ITR) form where you report income that doesn’t fall under other heads like salary, business income, or capital gains.
2. Taxability:
- General Rule: Interest from FDs is fully taxable as per your income tax slab rate. This means the interest income is added to your total income, and you pay tax on it according to the tax bracket you fall into.
Income Tax Slab Rates for AY 2026-27 (New Regime)
| Income Slab (₹) | Tax Rate (%) |
|---|---|
| 0 – 4,00,000 | Nil |
| 4,00,001 – 8,00,000 | 5 |
| 8,00,001 – 12,00,000 | 10 |
| 12,00,001 – 16,00,000 | 15 |
| 16,00,001 – 20,00,000 | 20 |
| 20,00,001 – 24,00,000 | 25 |
| Above 24,00,000 | 30 |
- No Tax Up to ₹12 Lakh: Individuals with a net taxable income up to ₹12 lakh will have no tax liability due to an increased rebate under Section 87A.
- New Tax Regime is Default: The new tax regime is the default option for taxpayers. However, you can still choose the old regime if it’s more beneficial for you.
- Surcharge: A surcharge is levied on income tax if your income exceeds ₹50 lakh. The surcharge rates remain the same as in AY 2025-26.
- Health and Education Cess: A Health and Education Cess of 4% is applicable on the income tax plus surcharge.
- Exception – Section 80TTB: Senior citizens (aged 60 years or above) can claim a deduction of up to ₹50,000 on interest income from deposits held in banks, post offices, or co-operative societies. This deduction is specifically provided under Section 80TTB of the Income Tax Act. This is allowed in Old Tax Regime. It is not allowed in New Tax Regime.
3. Adjustment of TDS (Tax Deducted at Source):
- TDS deducted on FDR interest Income can be adjusted from Tax Liability at the time of filing of ITR or refund can be taken if extra TDS is deducted at the time of filing of ITR.
4. Advance Tax:
- If your tax liability on FD interest (and other income) exceeds ₹10,000 in a financial year, you are required to pay advance tax in installments. But if you are Senior Citizen of age 60 years or above and have no business income then No need to pay Advance Tax . You can pay tax at the time of filing of ITR
5. Reporting in ITR:
- You need to report the interest income from FDs under the “Income from Other Sources” section in your ITR.
Key Points to Remember:
- FD interest is generally taxable income.
- Senior citizens have a special deduction under Section 80TTB.
- TDS is applicable if interest exceeds the specified threshold.
- You might have to pay advance tax if your tax liability is high.
- Accurate reporting in your ITR is crucial.
Reporting of FD to the Income Tax Department by Banks and post office
You’re asking about how banks and post offices report Fixed Deposits (FDs) to the Income Tax Department in India. Here’s a breakdown of the reporting process:
1. TDS on FD Interest:
- Threshold: Banks and post offices are required to deduct TDS (Tax Deducted at Source) on FD interest if the interest earned during a financial year exceeds a certain threshold. This threshold is:
- ₹40,000 for resident individuals (other than senior citizens) and Hindu Undivided Families (HUFs).
- ₹50,000 for senior citizens.
- Deduction and Reporting: When TDS is deducted, the bank/post office deposits this amount to the Income Tax Department on your behalf. They also provide you with a TDS certificate (Form 16A) showing the amount of TDS deducted.
- Form 15G/15H: If your total income is below the taxable limit or you don’t have any tax liability, you can submit Form 15G/15H to the bank/post office to avoid TDS deduction.
2. Annual Information Return (AIR):
- Details Reported: Banks and post offices file an Annual Information Return (AIR) with the Income Tax Department. This return includes information about:
- High-value FD transactions (generally above ₹10 lakhs)
- Interest income credited to FD accounts
- Details of FD holders (name, PAN, address, etc.)
- Purpose: The AIR helps the tax department track and verify information related to FD investments and interest income.
Mr A has made following FDRs it will be reported to Income Tax Department
| Feature | ICICI Bank |
| FDR Amount | ₹11,00,000 |
| AIR Reporting (by Bank) | Yes, as the amount exceeds ₹10,00,000 |
| ITR Reporting (by Mr. A) | Interest income to be shown, (FDR Amount to be shown in Assets and Liabilities only if Total Income Exceeds Rs 50 Lakh) |
Mr A has made following FDRs these will not be reported to Income Tax Department
| Feature | ICICI Bank | SBI Bank |
|---|---|---|
| FD Amount | ₹5,00,000 | ₹6,00,000 |
| AIR Reporting (by Bank) | No | No |
| ITR Reporting (by Mr. A) | Interest income to be shown, (FDR Amount to be shown in Assets and Liabilities only if Total Income Exceeds Rs 50 Lakh) | Interest income to be shown, (FDR Amount to be shown in Assets and Liabilities only if Total Income Exceeds Rs 50 Lakh) |
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