How to Avoid TDS on FD Interest 2026: Form 15G and 15H Explained

Fixed Deposits (FDs) are a very safe way to grow your savings. Many people invest in FDs because they offer steady returns. However, you must know about tax rules. First, when your FD earns money, the bank might cut some tax. This cut is specifically called Tax Deducted at Source (TDS). Therefore, it is highly important to understand how TDS works. Moreover, you should definitely know how to save your hard-earned money. In this blog, we will clearly explain TDS on FD interest. Additionally, we will clearly show you how to use Form 15G and Form 15H. Consequently, you can stop this tax cut easily. Ultimately, you can safely keep all your interest money.

What is TDS on FD Interest?

First, let us understand the basics very clearly. TDS simply means Tax Deducted at Source. The government strictly asks banks to collect tax directly. Whenever your bank gives you interest, they first check the amount. If the interest is high, they take a small part. Then, they send this money directly to the government. Thus, TDS on FD interest always reduces your total money. For instance, imagine you earn ₹50,000 as interest. The bank will not give you the full amount. Instead, they will deduct tax first. After that, they will give you the rest.

When Do Banks Deduct TDS?

Banks do not deduct tax on every fixed deposit. Instead, they strictly follow specific limits set by the government. Currently, the rules are quite simple. For regular citizens under 60 years old, the limit is ₹40,000 yearly. Therefore, if your total interest crosses ₹40,000, they will surely cut TDS. On the other hand, senior citizens have a much higher limit. Specifically, their limit is ₹50,000 per year. So, if a senior citizen earns more than ₹50,000, the bank deducts tax. Usually, the standard TDS rate is exactly 10%. However, if you do not give your PAN card, they cut 20% tax. Because of this, always link your PAN card immediately.

How to Avoid TDS on FD Interest

Many people frequently ask how to stop this tax deduction. Actually, the answer is very simple. If your total yearly income is below the taxable limit, you definitely pay no tax. Consequently, the bank should never deduct TDS on FD interest. To tell the bank this, you must submit a declaration form. Specifically, you need to use Form 15G or Form 15H. These forms boldly declare that your total income is low. Therefore, you request the bank to pay your full interest. As a result, you successfully avoid any tax cuts. In the next sections, we will discuss these forms very closely.

What is Form 15G?

Form 15G is a very simple declaration form. Mainly, it is meant for individuals under 60 years of age. Additionally, Hindu Undivided Families (HUFs) and trusts can use it. By signing this form, you clearly tell the bank about your income. You declare that your total income is less than the basic exemption limit. Currently, this limit is ₹2.5 lakh under the old tax regime. Furthermore, your total FD interest must also be less than this limit. If you meet these conditions, you can submit Form 15G safely. Consequently, the bank will absolutely not deduct any TDS on FD interest. Clearly, it is a highly helpful tool for low-income earners.

Also Read: Best Savings in 2026: Small Finance Banks or Post Office India?

What is Form 15H?

Form 15H is very similar to Form 15G. However, it is exclusively for senior citizens. You must be 60 years or older to use this specific form. Just like Form 15G, you use Form 15H to declare your tax status. Specifically, you declare that your final tax liability is strictly zero. In other words, you do not have to pay any income tax. Unlike Form 15G, there is no separate limit on the interest amount here. As long as your total taxable income is below the exemption limit, you easily qualify. The exemption limit for senior citizens is ₹3 lakh. For super senior citizens, it is ₹5 lakh. Therefore, Form 15H really helps older people protect their FD interest.

Differences Between Form 15G and Form 15H

To make things much clearer, let us look at a simple comparison table. This table clearly shows the main differences between the two forms.

As you can clearly see, age is the biggest difference. Therefore, choose the right form solely based on your age.

Steps to Submit Form 15G and 15H

Submitting these forms is very easy today. Most banks currently offer both online and offline options.

First, let us look at the online method. Today, internet banking is very popular everywhere. Therefore, you can easily submit the form directly from home.

• Log in to your bank’s net banking website first.
• Then, look carefully for a section called ‘Tax’ or ‘Form 15G/15H’.
• Click on the relevant link immediately.
• After that, fill in your details very carefully. Usually, the bank perfectly pre-fills most information for you.
• Finally, check everything completely and submit the form online.

Alternatively, you can totally choose the offline method. Some people still prefer visiting the branch.

• First, go directly to your bank branch.
• Next, explicitly ask the staff for a physical copy of Form 15G or 15H.
• Then, fill the form with a pen carefully. Ensure all details are totally correct.
• After filling it, securely attach a clear copy of your PAN card.
• Finally, proudly hand it over to the officer and get a receipt.

Important Rules to Remember

Before you submit these forms, you must strictly remember a few important rules. If you unfortunately make a mistake, you might face heavy penalties.

• First and foremost, you absolutely must have a valid PAN card. Without a PAN, these forms are entirely useless.
• Secondly, submit the forms perfectly at the start of the financial year. April is definitely the best time. If you delay, the bank might instantly deduct TDS on FD interest.
• Thirdly, you strictly must submit separate forms to every single bank. One form definitely does not cover all your banks.
• Furthermore, you must securely submit a new form every single year. These forms are only valid for strictly one financial year.
• Most importantly, never submit a false declaration ever. If you actually owe tax, the Income Tax Department can easily fine you heavily. Always calculate your tax very honestly.

What If You Forgot to Submit the Forms?

Sometimes, people simply forget to submit Form 15G or 15H. As a result, the bank instantly deducts TDS on FD interest. If this sadly happens to you, do not panic at all. Your money is definitely not lost forever. You can still get it back very easily. However, you absolutely must file an Income Tax Return (ITR). When you finally file your ITR, you must show all your income very clearly. The tax department will then check your details thoroughly. If they clearly see that you owe no tax, they will happily refund the TDS amount. Therefore, strictly keeping track of your income is absolutely crucial.

Conclusion

To sum up, actively managing your fixed deposits is very important today. Earning interest is undeniably good, but saving it from tax is significantly better. TDS on FD interest can sadly reduce your earnings easily. Thankfully, the government generously provides Form 15G and Form 15H to help you out. By perfectly submitting the right form, you can permanently avoid this tax deduction. Always definitely remember to check your total income first. If your income is genuinely low, use these forms very confidently. Furthermore, make it a firm, unbreakable habit to submit them every April. Thus, you will proudly keep your full interest and rapidly grow your wealth.

FAQs

1. What is the limit for TDS on FD interest?

For normal citizens, banks normally deduct TDS if the yearly interest quickly crosses ₹40,000. However, for senior citizens, the limit is naturally higher at ₹50,000.

2. Can I submit Form 15G online?

Yes, absolutely. Customers of most major banks can submit both Form 15G and Form 15H through online platforms of their banks. The customers can access their services through both net banking and mobile apps.

3. Do I need a PAN card for Form 15G/15H?

Yes, a valid PAN card is strictly mandatory. Without a PAN card, banks will instantly refuse your declaration forms. Moreover, they will strictly deduct TDS at a higher 20% rate.

4. What happens if I submit a false Form 15G?

Submitting a false form is undeniably a very serious offense. The Income Tax Department can easily impose heavy financial penalties. Therefore, only submit it if your actual tax is truly zero.

5. I forgot to submit the form, and TDS was cut. How do I get a refund?

If the bank has already cut TDS, you definitely cannot get it back from them. Instead, you strictly must file your Income Tax Return (ITR). Ultimately, the tax department will officially refund your money.

Also Read: FD Interest Payout Options 2026: Monthly, Quarterly or Cumulative?