Fixed Deposit Limits from 2026 along with New IT Rules

Overview

In India, Fixed Deposits (FDs) are considered the safe investments but if total fresh deposit amount is above Rs.10 lakh per bank in a Financial Year then banks has to report to the Income Tax Department via Statement of Financial Transactions (SFT) which appears in your AIS/TIS.

Rules on Fixed Deposit Renewals

FD renewals are not reported to the IT Department through SFT as renewals describes reinvestment of previously deposited funds i.e., not a fresh inflows and it does not trigger any scrutiny.

Draft Income Tax Rules 2026 For Deposits and Withdrawals

Earlier, PAN was required only for single deposits over Rs.50,000 but now,

It is proposed to increase the deposit limits up to Rs.10 lakh in a financial year across all bank accounts. This Ten Lakh limit will apply to both cash deposits and withdrawals.

Here,

"Across all bank accounts" means the Rs.10 lakh is not per bank account, but the total of all your bank accounts combined in a financial year.

TDS Thresholds on FD Interest

TDS at 10% applies on Fixed Deposit interest income if amount exceeds specified thresholds.

How To Skip This TDS?

Taxpayers can avoid TDS by filing appropriate forms if their total income is below exemption limits.

For Senior Citizens

Seniors can file Form 15H if their total tax liability is zero. Under the New Regime, this applies to incomes up to Rs.12 lakh, while under the Old Regime, it applies up to Rs.5 lakh.

For Non-Seniors/HUF

Non-seniors must file Form 15G if their total income is below the Basic Exemption Limit. Under New Regime Rs.4 lakh while under Old regime Rs.2.5 lakh.

Form 15H or 15G Filing Timeline

This form should be submitted at the beginning of the Financial Year per bank.

Spreading Fixed Deposits Across Multiple Banks

By dividing Fixed Deposit principal across banks, taxpayers can:

• Keep per-bank interest under TDS thresholds.
• Ensure fresh Fixed Deposits remain below Rs.10 lakh for SFT reporting.

For Example

If a senior citizen deposits in multiple banks, the interest accrued can be structured as follows:

Note: 

You must try to put money in different banks as deposit insurance and credit Guarantee Corporation (DICGC) insures up to Rs.5 lakh per bank. 

15G and 15H into Single Form 121 as per new IT Rules

Form 121 will replace both 15G and 15H for all eligible taxpayers as to simplify compliance by removing age-based confusion and reducing form complexity.

It will be used for the same purpose as done earlier to avoid TDS.

The new form is simpler, PAN-based, age-neutral, and must be filed every financial year.