TDS

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Querist : Anonymous

Querist : Anonymous (Querist)

19 February 2010 Whether TDS is to be applied to the Saving bank Interest??

CA Chitresh Gupta

CA Chitresh Gupta (Expert)
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19 February 2010 Saving Bank interest is not liable to TDS

Querist : Anonymous

Querist : Anonymous (Querist)

20 February 2010 I want more Clarification regarding this because under TDS Provision u/s 194A it is written only interest income then why it not apply to Saving Bank Interst??

Querist : Anonymous

Querist : Anonymous (Querist)

20 February 2010

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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27 July 2025 Great question! Here’s the clarification on TDS on **Saving Bank Interest** under **Section 194A**:

* 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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