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FD Interest: Slab Rate, Sec 393 (old 194A) TDS, Form 121 (old Form 15G / 15H)

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FD interest is the most commonly underdeclared income in India. Banks report every rupee to AIS via SFT. CPC computers compare AIS with ITR automatically. A missed ₹50,000 FD interest triggers a ₹25,000+ demand notice. Know the TDS rules and the Form 121 (old Form 15G/15H) exemption.

Provisions

Sec 393 (old 194A); Sec 393(6) (old 197A); Sec 93 (old 57); Rule 114-I; Sec 5

Analysis

How FD interest appears in AIS: Your bank files SFT to TRACES quarterly. Interest credited or accrued above ₹10K per account appears in AIS Category 5 (Interest from Deposits). If you have FDs in 3 banks: all 3 show up in AIS. Total AIS interest figure must match what you declare in ITR Schedule OS (Other Sources). Mismatch = Sec 270(1), Income-tax Act 2025 (old Sec 143(1)) notice. TDS threshold per bank: The ₹40K threshold (₹50K senior) is per bank, not per FD. All FDs in one bank are aggregated. Example: SBI FD interest ₹35K + SBI RD interest ₹10K = ₹45K → TDS applies (above ₹40K). But SBI ₹35K + HDFC ₹35K = SBI below threshold (no TDS from SBI) + HDFC below threshold (no TDS from HDFC) → but your total income includes both ₹35K amounts. You must pay tax on ₹70K total even though no TDS was deducted. Form 121 (old Form 15G) eligibility: Non-senior. TWO conditions both must be met: (1) FD income from THAT bank must be below ₹40K.

Close

  1. List all FDs across all banks, amount, rate, maturity date, interest credited this FY
  2. Download Form 131 (old Form 16A) from each bank (TDS certificate for FD interest) or check Form 168 (old Form 26AS)
  3. Download AIS, Category 5 (Interest from deposits), add up all banks
  4. Compute total FD interest for the year. This is income from other sources.
  5. Submit Form 121 (old Form 15G or 15H) to each bank before first interest credit (April) if eligible
  6. If total income below ₹2.5L (non-senior): Form 121 (old Form 15G) eligible, no TDS needed

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