TDS
Querist : Anonymous
Querist : Anonymous
Querist : Anonymous
* Section 194A deals with TDS on interest other than interest on securities.
* However, **interest on Savings Bank accounts is exempted from TDS**, even though it is interest income.
* This exemption is explicitly provided by the Income Tax Act. The rationale is that interest earned on savings accounts is usually small and meant for everyday transactions, so TDS is not deducted on it.
* On the other hand, interest on Fixed Deposits (FDs), Recurring Deposits (RDs), and other term deposits **is subject to TDS** under Section 194A if it crosses the prescribed threshold (usually ₹40,000 or ₹50,000 per annum).
So, although Section 194A mentions "interest," **interest on Savings Bank accounts is specifically excluded from TDS deduction**.
If you want, I can share the exact legal provision or relevant CBDT circular for your reference. Would you like that?
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