TDS Threshold Doubled to ₹1 Lakh for Senior Citizens with Form 15H

The most important point is this: India’s TDS threshold rules control withholding, not your final tax bill. A higher threshold can reduce cash flow friction, but the income may still be taxable in India. If you are a U.S. tax resident, that same Indian income is often also reportable on your U.S. return for tax year 2026 (filed in 2027).

This is especially relevant for Indian immigrants, green card holders, and long-term visa holders who still hold Indian fixed deposits, SCSS accounts, or rental property in India.

As of Tuesday, January 20, 2026, reporting indicates a doubling of the TDS threshold on interest for senior citizens under Section 194A (from ₹50,000 to ₹1,00,000 per financial year, per payer). At the same time, the rent TDS threshold under Section 194I remains ₹2,40,000 per year, with only proposals circulating for Budget 2026.

Side-by-side comparison: interest (seniors) vs rent (housing)

1) Interest income for senior citizens: what the ₹1,00,000 TDS threshold means

Under the reported change, the TDS threshold on interest for senior citizens rises from ₹50,000 to ₹1,00,000 per financial year under Section 194A.

This applies to interest paid by banks (including fixed deposits), post offices, and co-operative banks. Practical effect: if your total interest with a payer stays at ₹1,00,000 or less in the financial year, no TDS should be deducted by that payer.

The “per payer” detail matters. Two banks can each pay under the limit, with no TDS. Your total interest could still be large and potentially taxable.

Example (with numbers)

• Mrs. Rao (age 67) earns ₹95,000 FD interest from Bank A in FY 2026–27.
• Under a ₹1,00,000 threshold, Bank A should not deduct TDS.
• If she also earns ₹60,000 from Bank B, Bank B applies its own threshold.

This means two banks can each pay under the limit with no withholding, but your combined interest may still be sizable and taxable.

2) How Section 80TTB / 80TTA interacts with Form 15H

Many readers mix up these three items: the TDS threshold, deduction rules, and Form 15H. They are distinct concepts for withholding, taxable-income computation, and requesting no TDS respectively.

1. TDS threshold (Section 194A). When a bank must withhold tax.
2. Deduction (Section 80TTB / 80TTA). How much interest may be deducted in computing taxable income.
3. Form 15H. A declaration to request no TDS if your tax liability is nil.

The deduction rules (as commonly applied)

• Section 80TTB (senior citizens 60+): deduction up to ₹50,000 on interest from deposits.
• Section 80TTA (non-seniors): deduction up to ₹10,000 (generally on savings interest).

The key comparison point: the reported higher TDS threshold (₹1,00,000) is larger than the common 80TTB deduction cap (₹50,000). That means some seniors will face no TDS, yet still have taxable interest.

Where Form 15H fits

Even if interest exceeds the TDS threshold, an eligible senior citizen can submit Form 15H to request no TDS, but only if the declaration conditions are met (commonly, tax payable is nil after deductions and rebates).

Example: Mr. Singh (age 72) expects ₹1,40,000 total interest from Bank A. Even with a ₹1,00,000 threshold, TDS would normally apply. If his total taxable income results in no tax payable, Form 15H may prevent withholding.

3) SCSS: quarterly interest and the ₹1,00,000 trigger

For the Senior Citizen Savings Scheme (SCSS), reported guidance says TDS is triggered only when annual interest exceeds ₹1,00,000.

The SCSS rate is 8.2% p.a. for Q4 FY 2025–26, and interest is paid quarterly on April 1, July 1, October 1, and January 1.

Example (SCSS interest math)

If a senior has ₹12,00,000 in SCSS at 8.2%, annual interest is about:

• ₹12,00,000 × 8.2% = ₹98,400 per year

That sits below ₹1,00,000, so TDS may not apply under the reported rule. The interest can still be taxable.

4) Rent TDS under Section 194I: what is confirmed vs proposed

Housing-related tax changes often get mixed into the same conversation as interest relief. Here is the clean separation.

Current rent TDS threshold under Section 194I: ₹2,40,000 per year. As of Jan 20, 2026: no confirmed increase in that threshold.

There are policy proposals being discussed ahead of Budget 2026 (expected July 2026), including a suggested 100% tax exemption on rental income up to ₹3,00,000, limited to homes costing up to ₹50,00,000.

Those proposals are not law today. Treat them as a wishlist until notified officially.

5) What’s officially confirmed right now (and why timing matters)

Reports note no clear, public confirmation from the Finance Minister or CBDT presented as a single, finalized “TDS rationalisation” order. At least one bank has reported implementation.

At the same time, the income-tax portal for AY 2025–26 has listed the older ₹50,000 senior-interest TDS limit. This timing gap matters for seniors and NRIs.

India’s financial year FY 2026–27 starts April 1, 2026, and the first quarter interest postings can arrive quickly. Banks may apply changes payer-by-payer and system-by-system.

When in doubt, confirm the threshold applied on your actual interest certificate and Form 26AS/AIS entries.

U.S. tax angle for immigrants and NRIs: TDS is not the end

If you are a U.S. tax resident under the green card test or substantial presence test, you generally report worldwide income on Form 1040 for tax year 2026 (filed in 2027). See IRS Publication 519 (U.S. Tax Guide for Aliens) at irs.gov/pub/irs-pdf/p519.pdf.

That can include interest from Indian bank deposits and SCSS (often reported as interest income), net rental income from Indian property (income and expenses), and Indian TDS paid (often a credit item, if eligible).

Common U.S. forms in these fact patterns include Form 1116 (Foreign Tax Credit), FBAR (FinCEN 114) if foreign accounts exceed $10,000 aggregate at any time, and Form 8938 (FATCA), if foreign assets exceed thresholds.

IRS starting points: international taxpayers portal at irs.gov/individuals/international-taxpayers and forms and publications at irs.gov/forms-pubs.

Quick reference: U.S. foreign reporting thresholds (common cases)

Key U.S. deadlines (tax year 2026, filed 2027)

Deadline Alert: Missing FBAR filing is a frequent issue for new immigrants. The trigger is $10,000 aggregate, not per account.

Common mistakes (and how to avoid them)

• Assuming “no TDS” means “no tax.” No TDS may simply mean no withholding. Keep track of total taxable income.
• Confusing 80TTB with the TDS threshold. 80TTB is a deduction up to ₹50,000. The reported TDS threshold is ₹1,00,000.
• Submitting Form 15H when tax is actually payable. Form 15H is a declaration. Wrong declarations can create compliance trouble.
• Rent confusion: mixing proposals with law. A suggested ₹3,00,000 rental exemption is not a rule today.
• U.S. reporting gaps for Indian accounts. TDS in India does not replace FBAR or Form 8938 reporting.

Who this applies to and action items

You are a senior citizen interest beneficiary if you are 60+, earn deposit interest, and your interest per payer stays at or below ₹1,00,000 under the reported Section 194A threshold.

You are a Form 15H candidate if you are a senior citizen and your total income results in nil tax payable, even if your interest exceeds the TDS threshold.

You are in the rent TDS status quo if your situation involves rent under Section 194I, because the ₹2,40,000/year threshold is still the operative number as of Jan 20, 2026.

You are a U.S. worldwide-income filer if you meet the IRS resident tests and must report Indian interest and rent on Form 1040 for tax year 2026 (filed in 2027).

Action items: confirm the threshold your bank applied for FY 2026–27, retain interest and TDS certificates, and review whether U.S. reporting (FBAR/Form 8938) applies before April 15, 2027.