TDS made simple

Section 194A covers the provision for TDS deduction on interest other than securities. This means it covers interest earned on fixed deposits, recurring deposits

This section is only applicable to a resident. Thus, the provisions of section 194A are not applicable in case of payment of interest to a non-resident

Section 195 of the Income Tax Act, 1961, specifies the TDS provision in the case of an individual making a payment by way of interest or any other amount other than salary to an NRI or a foreign company.

For Residents, the TDS on FD interest is 10%. It is 20% for Fixed Deposits held without submission of PAN details or in case PAN is Inoperative

Section 194A (Resident): FD interest up to Rs. 50,000 for general public and up to Rs. 1,00,000 for senior citizens is exempted from TDS in one financial year.

Section 195 (NRO): There is no threshold limit to deduct TDS under Section 195. However, the payer must deduct tax only when the payment made to a non-resident is taxable in India.

TDS deducted is reflected on the 26AS which can be accessed through the Income tax portal

Yes – If total cash withdrawal exceeded threshold limit.

The Bank has decided to take a self-declaration from its customers in a standard format wherein the customer will be required to certify about the fact that he has filed his tax returns or not. Bank will then assess the declaration from Income Tax website and based on the assessment, will allow higher threshold.

Unless a customer submits the declaration, the Bank will not be able to ascertain his compliance with respect to return filing for the past 3 years.  In such a case, if the customer withdraws in aggregate an amount of Rs 20 lakhs in cash from all his accounts with the Bank, then the Bank will start deducting tax as per the applicable rates

For a period of one financial year (April – Mar).

The tax will be deducted at the time of cash withdrawal once the applicable threshold limit is breached

Yes, customers like Central Government, State Government, Banks, Post offices, co-operative societies engaged in banking business, business correspondents, white label ATM operators (‘WLATMO’) authorized by RBI are exempt under Section 194N of the IT Act.  


Separately, from time to time, the Government has notified certain other classes of persons who are also eligible for exemption under Section 194N provided they satisfy certain specified conditions.  As on date, such eligible classes of customers include Commission agent or trader, operating under Agriculture Produce Market Committee (APMC), and registered under any Law relating to Agriculture Produce Market of the concerned State, Cash Replenishment Agencies (CRAs) and franchise agents of WLATMOs, ADs (and their franchise agents and sub-agents) and full-fledged money changers (and their agents).  In case any of the customers qualifies as exempt and fulfils the necessary conditions and also furnishes the proof thereof (for every FY basis), then they would not suffer any tax on cash withdrawals irrespective of the amount of cash withdrawn

In case the customer does not have either a valid PAN or PAN is in  Inoperative status , then the rate of tax deduction will be 20%.

No, NRIs can't fill these forms. Only a resident of India is eligible to fill Forms 15G or 15H

• You must be a resident of India.
• Your total income (including interest earnings) must not exceed the basic exemption limit.
• PAN is mandatory and its Operative status on Income Tax portal

Form 15G and 15H should ideally be submitted to the Bank and Financial Institutions at the beginning of the financial year to ensure TDS is not deducted on interest payments throughout the year

One can submit Form 15G and 15H to IDFC FIRST Bank both online via net banking or the mobile app and offline by visiting a branch.

Online submission

Step-1: Log in to your IDFC FIRST Bank internet banking account or mobile app.

Step-2: Click on “More” on the Home screen tab and select "Customer Service" section

Step-3: Click on FDs/RDs and select “Submit Form 15G/ 15H”

Step-4: Fill in the required details and submit.

Offline submission

Step-1: Visit your nearest IDFC FIRST Bank branch

Step-2: Collect and fill out a physical Form 15G and 15H

Step-3: Submit the completed form at the branch.

You can check the DTAA entered into by India with other countries from the income tax department's website by visiting the official government website

DTAA applies only when the transaction is taxable both in India and in another country. Also, one party involved in the transaction should be a non-resident (NR) or a foreign company (FC)

• Tax Residency Certificate (TRC): It is issued by the tax authorities of the resident country. It serves as proof to verify your residential status
• Online filed Form 10F: In case TRC does not cover all the details, such as nationality, tax identification number, address outside India, etc., such information will need to be filed electronically through Form 10F.