Senior citizen can avoid paying 10% TDS on FD Interest

Senior citizen can avoid paying 10% TDS on FD Interest


TDS on fixed deposit for the senior citizen is the tax deducted at the source which is levied on the interest income if it exceeds the limit of Rs.50, 000 in the Financial Year. The interest income of investment is taxable at your slab rate along with the applicable charges. At the time of crediting interest to your account, the bank deducts the TDS. If the amount of interest is beyond the above TDS on the FD interest limit of Rs.50, 000 for senior citizens then TDS is deducted. This limit is Rs.40, 000 for non-senior citizens.  

Who will get the discount?

The filing of Income Tax returns exempted only senior citizens who have income only from interest on pensions and fixed deposits and secondly that the pension and FD should be in the same bank. There are so many things to be filed in Form 12BBA which include the detail of deduction under section 80C, tax rebate under section 87A, and total income from interest from fixed deposits.

According to the Central Board of Direct Taxes, the bank calculates the total income of the taxpayer after the form is submitted. He considers the tax deduction and rebate under section 87A and the deduction of tax from the final income according to the slab rate. CBDT has administered that there should not be any problem in filling this form so CBDT asked to banks help the senior citizens for fill this form.

Sometimes, the bank will file the Income Tax Return on behalf of the senior citizen taxpayers. Actually, Senior Citizens find it difficult to file an Income Tax Return, because the rules of income tax keep changing from time to time.

Important points for TDS on Senior Citizen FD and ITR Filing: 

  • All the individual residents whose age is 60 years or above are eligible for a senior citizen FD investment.

  • If the set limit of Rs.50, 000 for senior citizens then the bank cannot deduct the TDS on FD interest rate income which is mentioned under section 194A.

  • The limit of Rs.50, 000 for FD interest rate income is calculated by every bank individually for an F.Y.

  • The TDS on senior citizen FD is deducted at the time of credit of interest and not on the maturity of FD. Therefore, if you have an FD investment for three years then the TDS on FD will be deducted at the end of each year.

  • The interest income earned from an FD investment of over Rs.50, 000 would be liable for the deduction of tax according to the slab rate which is applicable for senior citizens.

  • The interest income earned from company fixed deposits or bonds or NCDs who is not eligible for any tax benefits is applicable under Section 80TTB of the Income Tax Act.

The government of India provides some benefits for senior citizens at the time of filing their income tax returns too. Senior citizens whose age is 75 years or above then have only pension and interest as a source of income and are exempted from filing their income tax returns. The exemption limit in tax for senior citizens is set at Rs.3, 00, 000 and for super senior citizens whose age is 80 years and above, it is Rs.5, 00, 000. These and several other benefits are applicable for senior citizens at the time of filing of ITR.

Importance of submitting 12BBA

The main advantage of submitting Form 12BBA is that senior citizens do not have to worry about a refund of tax deducted on FD interest. According to the income tax rules, if a senior citizen whose age is 60 years and above has an interest income of more than Rs.50, 000 in a financial year then the bank will deduct 10% TDS from it.

For taxpayers who fall in the 5 percent and 10 percent income tax slabs, their money will go out in TDS. For example: If a person has an interest income of Rs 7Lakh then according to 10% TDS, he will lose Rs.70, 000. If the taxpayer submits Form 12BBA then he will have to pay a tax of Rs.52, 500. Taxpayers who do not fill the Form 12BBA will get a refund of Rs.17, 500.


It concluded that the government provides tax concessions to the elderly. Under this form 12BBA, senior citizens are exempted from paying TDS on FD interest. Senior citizens should submit the self-declaration form to their bank at the beginning of the F.Y. which includes Form 15G and Form 15H.

In case, the taxable income is less than the tax-exempt limit then the taxpayer can request the bank not to deduct the tax on the interest. From this year onwards, senior citizens whose age is 75 years and above who do not wish to file income tax returns then he or she can submit Form 12BBA to their bank.

eStartIndia will help you to file your TDS returns from the comfort of your home.


Radhika Punani
I am Radhika from Ambala city. I qualified LLM from Kurukshetra University and B.A.LLB from Maharishi Markandeshwar University

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