Seniors (aged 60 or older) can avoid Tax Deducted at Source (TDS) on fixed deposit (FD) interest by submitting Form 15H to their bank, provided their total annual income is below the taxable limit. With the limit revised from April 1, 2025, TDS is generally not deducted if total interest income from a bank is up to ₹1 lakh annually.
Utilise Form 15G and Form 15H
By submitting this form, they can avoid TDS on FD interest if their income remains below this threshold. Form 15H: Senior citizens (60 years and above) can use this form to declare their income is below ₹3 lakh, thus exempting them from TDS on interest income up to ₹1 lakh annually.
One of the most effective ways to save tax on FD interest is through Form 15G (for individuals below 60) and Form 15H (for senior citizens). These forms prevent TDS deduction when your total income falls below the taxable threshold.
Senior citizens receiving interest income from FDs can avail TDS exemption up to ₹1 lakh per year (for FY 2025-26). Till March 2025, senior citizens can claim tax exemption up to ₹50,000.
If your age is below 60 years, use Form 15G and if your age is 60 years or above, use Form 15H. By providing these forms to your bank, you ensure that TDS is not deducted, allowing you to receive your full FD interest without tax deductions provided your income remains within the exemption limit.
Under the old rules, if the interest earned by a senior citizen from bank deposits exceeded ₹50,000 in a year, the bank would deduct TDS at the applicable rate. With the new ₹1 lakh limit, senior citizens can now earn twice as much interest income without facing any deductions.
The best way to keep more of the interest you earn on your savings is to put your money in places where it can grow without being taxed every year. That could mean putting your money in a Roth IRA, HSA, or 529 plan, where the interest grows tax-free, or picking safe, tax-free investments like municipal bonds.
Unity Small Finance Bank offers attractive Fixed Deposit (FD) rates, ranging from 4.50% to 9.50% for the general public and 4.50% to 9.50% for senior citizens, depending on the tenure. These rates apply to FDs maturing in 7 days to 10 years.
Rate of TDS : TDS is to be deducted at the rate of 2 percent on payments made to the supplier of taxable goods and/or services, where the total value of such supply, under an individual contract, exceeds two lakh ifty thousand rupees.
Form 15H is a self-declaration form that a resident senior citizen can submit to a deductor like a bank to request non-deduction of TDS on passive income such as interest from fixed deposits, recurring deposits, rental income, etc. received during the financial year.
To avoid this TDS and eliminate the hassle of filing the income tax return to claim TDS refund, you can simply submit Form 15G or Form 15H (for senior citizens) to the financial institution. Basis this form, no TDS would be deducted from the deposit interest allowing you to save your income from TDS deductions.
Apply for a TDS waiver
Therefore, TDS applies to this interest amount. However, if your total income is below the minimum tax limit, you can declare the same by submitting Form 15G/ H for a TDS waiver. If your age is below 60, you need to submit Form 15G, while if you are above 60, you need to submit Form 15H.
If the actual tax payable is less than the TDS, you must file an Income Tax Return (ITR) to claim a TDS refund. Individuals below 60 can submit Form 15G, and senior citizens aged 60 or above can submit Form 15H at the beginning of the financial year to prevent TDS on interest income.
To avoid TDS deduction on your FD interest, you can submit Form 15G (if you're below 60 years old) or Form 15H (if you're a senior citizen) to your bank. These forms certify that your total income is below the taxable limit, and therefore, no TDS needs to be deducted.
Senior citizens who invest in Fixed Deposits enjoy an exemption limit of Rs. 50,000. Thus, TDS on FD interest at the rate of 10% will be deducted only if the interest earned is more than Rs. 50000 in a financial year.
The new senior tax deduction of up to $6,000 for single filers and $12,000 for joint filers, was created to help cover taxes on Social Security benefits. Taking the new senior deduction helps to reduce your taxable income, which can mean less tax or potentially an even bigger tax refund when you file your return.
Bank FD interest rate for senior citizens
Jana Small Finance Bank is offering 7.5% interest rate on fixed deposits with a three-year tenure for senior citizens. slice Small Finance Bank is the second bank providing 7.5% interest rate on fixed deposits with a three-year tenure for senior citizens.
The SBI Amrit Vrishti Scheme 2026 (also known as the SBI 444 Days FD) is a special fixed deposit product from State Bank of India offering a fixed tenure of 444 days with competitive interest rates. As of December 19, 2025, the scheme offers 6.45% p.a. to regular investors.
Your choice should be based on your personal financial goals, risk tolerance, and simplicity. Post Office FDs are a good choice for those who want the highest level of security and stable returns. On the other hand, bank FDs offer greater flexibility, potentially higher interest rates and greater flexibility.
The carried interest loophole allows investment managers to pay the lower 23.8 percent capital gains tax rate on income received as compensation, rather than the ordinary income tax rates of up to 40.8 percent that they would pay for the same amount of wage income.