{"id":1487,"date":"2025-02-07T15:55:50","date_gmt":"2025-02-07T10:25:50","guid":{"rendered":"https:\/\/www.caclubindia.com\/guide\/?p=1487"},"modified":"2025-07-01T12:27:02","modified_gmt":"2025-07-01T06:57:02","slug":"section-194a","status":"publish","type":"post","link":"https:\/\/www.caclubindia.com\/guide\/section-194a\/","title":{"rendered":"Section 194A: Threshold Limits Changes From 1st April 2025"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\r\n<div class=\"ez-toc-title-container\">\r\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\r\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\r\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#What_is_Section_194A_of_Income_Tax_Act\" >What is Section 194A of Income Tax Act?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#Current_Threshold_Limits\" >Current Threshold Limits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#Proposed_Threshold_Limits\" >Proposed Threshold Limits<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#Effective_Date\" >Effective Date<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#Time_of_Deduction\" >Time of Deduction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#Rate_of_TDS_us_194A\" >Rate of TDS u\/s 194A<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#Who_is_Liable_to_deduct_TDS\" >Who is Liable to deduct TDS?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#Exemptions_from_TDS_us_194A\" >Exemptions from TDS u\/s 194A<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#Due_Date_To_Deposit_TDS\" >Due Date To Deposit TDS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#Lower_TDS_Deduction_and_Exemption\" >Lower TDS Deduction and Exemption<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#Form_15G15H_Section_197A\" >Form 15G\/15H (Section 197A)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#LowerNil_TDS_Certificate_Section_197\" >Lower\/Nil TDS Certificate (Section 197)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/#FAQs\" >FAQs<\/a><\/li><\/ul><\/nav><\/div>\r\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Section_194A_of_Income_Tax_Act\"><\/span>What is Section 194A of Income Tax Act?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 194A of Income Tax Act is applicable on payment of interest on securities to a resident.<\/p>\n\n\n\n<p>It requires deduction of TDS on interest payments other than interest on securities made to resident individuals or entities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Current_Threshold_Limits\"><\/span>Current Threshold Limits<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Payer<\/strong><\/td><td><strong>Current Threshold<\/strong><\/td><td><strong>Current Threshold<br>(when payee is senior citizen)<\/strong><\/td><\/tr><tr><td>A banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution, referred to in section 51 of that Act)<\/td><td>Rs. 40,000\/-<\/td><td>Rs. 50,000\/-<\/td><\/tr><tr><td>A co-operative society engaged in carrying on the business of banking<\/td><td>Rs. 40,000\/-<\/td><td>Rs. 50,000\/-<\/td><\/tr><tr><td>On any deposit with post office under any scheme framed by the Central Government and notified by it in this behalf<\/td><td>Rs. 40,000\/-<\/td><td>Rs. 50,000\/-<\/td><\/tr><tr><td>Any other case<\/td><td>Rs. 5,000\/-<\/td><td>Rs. 5,000\/-<\/td><\/tr><tr><td>A cooperative society referred to in clause (v) and clause (viia) of sub-section (3) of section 194A<\/td><td>Rs. 40,000\/-<\/td><td>Rs. 50,000\/-<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Proposed_Threshold_Limits\"><\/span>Proposed Threshold Limits<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Payer<\/strong><\/td><td><strong>Proposed Threshold<\/strong><\/td><td><strong><strong>Proposed<\/strong> Threshold<br>(when payee is senior citizen)<\/strong><\/td><\/tr><tr><td>A banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution, referred to in section 51 of that Act)<\/td><td>Rs. 50,000\/-<\/td><td>Rs. 1,00,000\/-<\/td><\/tr><tr><td>A co-operative society engaged in carrying on the business of banking<\/td><td>Rs. 50,000\/-<\/td><td>Rs. 1,00,000\/-<\/td><\/tr><tr><td>On any deposit with post office under any scheme framed by the Central Government and notified by it in this behalf<\/td><td>Rs. 50,000\/-<\/td><td>Rs. 1,00,000\/-<\/td><\/tr><tr><td>Any other case<\/td><td>Rs. 10,000\/-<\/td><td>Rs. 10,000\/-<\/td><\/tr><tr><td>A cooperative society referred to in clause (v) and clause (viia) of sub-section (3) of section 194A<\/td><td>Rs. 50,000\/-<\/td><td>Rs. 1,00,000\/-<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Effective_Date\"><\/span>Effective Date<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These amendments will take effect from the 1st day of April 2025.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Time_of_Deduction\"><\/span>Time of Deduction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The deduction of tax must be made at the time of crediting such interest to the payee or at the time of its payment in cash or by any other mode, whichever is earlier.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Rate_of_TDS_us_194A\"><\/span>Rate of TDS u\/s 194A<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.caclubindia.com\/guide\/tds-rates\/\"><strong>TDS<\/strong><\/a> is to be deducted at 10% on the interest amount.<\/p>\n\n\n\n<p><strong>Note: <\/strong>If the payee does not provide a PAN or provided invalid PAN, the TDS rate will increases to 20%.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_is_Liable_to_deduct_TDS\"><\/span>Who is Liable to deduct TDS?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>All persons such as a Partnership, a Company, an Association of Person (AOP), or a Body of Individuals (BOI) other than an individual and HUF subject to certain conditions.<\/p>\n\n\n\n<p>An individuals or a HUF that their sales\/ gross receipts\/ turnover from business or profession exceeds Rs. 1 crore (in case of business) and Rs. 50 Lakhs in case of services.<\/p>\n\n\n\n<p><strong>Such as &#8211;<\/strong> Banks, Co-operative Banks, Post Offices, Companies &amp; Other Entities etc.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemptions_from_TDS_us_194A\"><\/span>Exemptions from TDS u\/s 194A<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Interest paid to banks for interest on savings, partnership firm to its partners, LIC, UTI, insurance companies or other financial institutions is exempted from TDS but taxable as income.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Due_Date_To_Deposit_TDS\"><\/span>Due Date To Deposit TDS<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>April to Feb &#8211; 7th of the following month.<\/li>\n\n\n\n<li>March &#8211; 30th of April<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Lower_TDS_Deduction_and_Exemption\"><\/span>Lower TDS Deduction and Exemption<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Form_15G15H_Section_197A\"><\/span>Form 15G\/15H (Section 197A)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If a resident individual (other than a company or firm) submits Form 15G (below 60 years) \/ Form 15H (above 60 years), no TDS is deducted if total income is below the taxable limit.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"LowerNil_TDS_Certificate_Section_197\"><\/span>Lower\/Nil TDS Certificate (Section 197)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Taxpayers can apply for a lower or nil TDS certificate if their TDS liability is higher than their actual tax liability.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Form 13 must be submitted to the Assessing Officer (AO) for approval.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If granted, TDS is deducted at a lower rate or not at all for the financial year.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1738922136055\"><strong class=\"schema-faq-question\">What types of interest are covered under Section 194A?<\/strong> <p class=\"schema-faq-answer\">Interest on FDs, recurring deposits (RDs)<br\/>Interest on loans from NBFCs<br\/>Interest paid by co-operative societies (unless exempt)<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1738922148523\"><strong class=\"schema-faq-question\">Can a taxpayer avoid TDS deduction u\/s 194A?<\/strong> <p class=\"schema-faq-answer\">Yes, by submitting Form 15G\/15H (if eligible) to the deductor.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1738922171812\"><strong class=\"schema-faq-question\">Is TDS deducted on interest paid to NRIs?<\/strong> <p class=\"schema-faq-answer\">No, interest paid to NRIs is covered u\/s 195, not 194A.<\/p> <\/div> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>What is Section 194A of Income Tax Act? Section 194A of Income Tax Act is applicable on payment of interest [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":1488,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center 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center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1487","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-income-tax"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\r\n<title>Section 194A: Threshold Limits Changes From 1st April 2025 - Tax Guide<\/title>\r\n<meta name=\"description\" content=\"Section 194A as per budget 2025 seeks to increase the TDS threshold for interest payments, reducing tax deduction requirements for depositors.\" \/>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.caclubindia.com\/guide\/section-194a\/\" \/>\r\n<meta 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