FD Interest TDS Calculator 2026: ₹50,000 / ₹1 Lakh Thresholds, Form 121 (15G/15H) and Tax Due
Will your bank deduct TDS on fixed-deposit interest in tax year 2026-27? Interest for the year, the per-bank threshold (₹50,000, or ₹1 lakh for senior citizens), TDS at 10% (20% without PAN), the quarter TDS starts, whether you can file Form 121 (which replaced Forms 15G and 15H from 1 April 2026), the real tax on the interest at your slab and the refund or extra tax at filing.
How it works
Interest = P × [(1 + r/4)⁴ − 1] (quarterly) or P × r · TDS = 10% (20% without PAN) of the whole year's interest once it exceeds ₹50,000 per bank (₹1,00,000 for senior citizens) — Income-tax Act 2025, s.393 · Tax due on interest = tax(other income + interest) − tax(other income), new regime slabs 0/5/10/15/20/25/30% with a rebate making tax nil up to ₹12 lakh, plus 4% cess · Form 121: tax on estimated total income nil AND (below 60) covered income ≤ basic exemption (₹4 lakh new regime; ₹2.5 lakh old)
From 1 April 2026 the Income-tax Act, 2025 replaced the 1961 Act, and the "financial year" became the "tax year". The rules for fixed-deposit interest carried over: a bank deducts tax at source when the interest it pays or credits to you in a tax year exceeds ₹50,000, or ₹1 lakh for a senior citizen (section 393). The limit is per bank, counting all its branches. Once it is crossed, TDS is 10% of the whole year's interest, not just the excess, or 20% if you have not given a valid PAN. Banks deduct as interest is credited or accrued, usually quarterly, so the deduction starts in the quarter the running total passes the threshold. TDS is only an advance payment. Interest is added to your income and taxed at your slab, so the calculator works out the real tax on it as the difference between tax with and without the interest. Under the new regime, unchanged for tax year 2026-27, the rebate makes tax nil up to ₹12 lakh of income, so many savers get all their TDS back as a refund. A 30% slab taxpayer owes more than the 10% withheld. Form 121, which replaced Forms 15G and 15H from 1 April 2026, lets you ask the bank not to deduct TDS when the tax on your estimated total income is nil. Depositors below 60 must also keep the income covered by the form within the basic exemption limit (₹4 lakh in the new regime); senior citizens only need nil tax. In the old regime senior citizens can deduct up to ₹50,000 of interest. Splitting deposits across banks can keep each under the threshold, but it only changes when tax is collected, not how much is due.
Worked example
With the defaults: ₹15,00,000 at 7.10% compounded quarterly earns ₹15,00,000 × [(1.01775)^4 − 1] = ₹1,09,369 in the year. That is above the ₹50,000 threshold for a depositor below 60, so with PAN the bank deducts 10% × ₹1,09,369 = ₹10,937, starting in Q2 when the running total passes ₹50,000 (₹26,625 in Q1, ₹53,723 by Q2). With ₹3,00,000 of other income the total is ₹4,09,369, which is below ₹12 lakh, so new-regime tax is nil: the tax actually due on the interest is ₹0 and the full ₹10,937 comes back as a refund at filing. Because the tax on total income is nil and the ₹1,09,369 of interest is within the ₹4,00,000 basic exemption, the depositor can submit Form 121 at the start of the year and no TDS is deducted at all.
Sources: AU Small Finance Bank notice: TDS on term deposits under Income Tax Act 2025 s.393, ₹50,000 / ₹1 lakh thresholds, 20% without PAN, Form 121 from 1 April 2026 · Form 121 under section 393(6) and Rule 211: nil-tax test and ₹4 lakh aggregate limit below 60 (TaxGuru) · Form 121 guide: eligibility and basic exemption limits by regime (ClearTax) · Income tax slabs and rebate for FY 2025-26 and 2026-27 (ClearTax)
Frequently asked questions
What is the TDS limit on FD interest in 2026?
For tax year 2026-27, banks deduct TDS when interest from all your deposits with that bank exceeds ₹50,000 in the year, or ₹1,00,000 for resident senior citizens (60 or older). TDS is 10% with a valid PAN and 20% without. For interest from payers other than banks, co-operative banks and the post office, the limit is ₹10,000.
What replaced Form 15G and Form 15H?
From 1 April 2026, under the Income-tax Act, 2025, Form 121 (Rule 211 of the Income-tax Rules, 2026) replaced both forms. It is one declaration for resident individuals, including senior citizens, saying that the tax on their estimated total income is nil. It must be submitted each tax year, preferably in April, and for each new deposit.
Who can submit Form 121?
A resident individual whose tax on estimated total income for the year is nil. Below 60, the total income covered by the declaration must also be within the basic exemption limit (₹4 lakh under the new regime, ₹2.5 lakh under the old). Senior citizens only need nil tax, which under the new regime can mean income up to ₹12 lakh because of the rebate. A valid PAN is required, and a false declaration is an offence.
Is TDS the final tax on FD interest?
No. It is an advance against your actual tax. Interest is added to your income and taxed at your slab: if your total tax is nil you get the TDS back as a refund when you file, and if you are in the 20% or 30% slab you pay the difference.
Does splitting FDs across banks avoid TDS?
It can keep the interest at each bank below the ₹50,000 or ₹1 lakh threshold, so no TDS is deducted, but the interest is still fully taxable and is reported by PAN in your AIS. It only changes when the tax is collected. Deposits at different branches of the same bank count together.
Is interest on a cumulative FD taxed every year?
Yes. Interest is taxable as it accrues each year, even if it is paid out only at maturity, and banks deduct TDS on the accrued interest each year once the threshold is crossed. Declaring it all in the year of maturity can create a mismatch with the AIS.
Related calculators
Planning estimate under the Income-tax Act, 2025 and Income-tax Rules, 2026 (in force from 1 April 2026, tax year 2026-27). Surcharge, special-rate income and other deductions are ignored. Thresholds and forms can change with each Finance Act; confirm with your bank, the Income Tax portal or a chartered accountant. A false Form 121 (old Form 15G/15H) declaration is a punishable offence.