senior citizens earning interest income from bank FDs to Rs 1 lakh in a given financial year from FY 2026. If the annual interest amount crosses Rs 1 lakh in a particular bank i.e. aggregate level in a bank. This means if a senior citizen can keep his/her interest income limited to up to Rs 1 lakh then no TDS will be deducted by the bank.
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This can very well be managed by investors if they calculate the right investment amount for a given interest rate to ensure it does not exceed the annual interest threshold of TDS. In this article we calculate how much money a senior citizen should invest in bank FD so that the interest component stays Rs 1 lakh or below. If it crosses Rs 1 lakh then TDS will be deducted, provided Form 15H is not submitted. Form 15H prevents TDS from being deducted provided the annual income of the senior citizen submitting it does not exceed Rs 3 lakh in the old tax regime.
For the calculations below we have taken two factors- interest payment is either cumulative or quarterly payout. The calculations below also show three highest interest paying bank FD rates across small finance, private and public sector banks for senior citizens.
Table showing cumulative (re-investment) FD interest rate calculation