The 60-second version
Section 194A requires deductor to withhold 10% TDS on interest paid to resident — use Form 15G/15H if below threshold; NRO interest uses higher NRI rates until redesignation.
Section 194A covers bank FD interest — not listed bond coupons
Section 194A applies to interest other than interest on securities — bank FD, savings (above threshold), and loan interest paid to resident.
Returning NRIs must redesignate NRO to resident savings before expecting resident 10% rate — NRO interest may attract 30% TDS until redesignation.
Securities lane: Section 193 guide for interest on government and corporate bonds.
Interest TDS sections
| Section | Income | Resident rate |
|---|---|---|
| 194A | Bank FD / savings | 10% |
| 193 | Bond / debenture | 10% |
| 194N | Cash withdrawal | 2%/5% |
| NRO (pre-redesignation) | NRO interest | 30% |
Section 194A compliance
Redesignate
NRO → resident savings.
Form 15G/H
If below threshold.
Form 26AS
Verify 194A credits.
80TTB
Senior — INR 50K deduction.
ITR
Declare interest income.
Flow
Section 194A kit
- Bank redesignation letter.
- Form 15G or 15H.
- FD interest cert.
- Form 26AS.
- AIS interest match.
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NRO trap
NRO FD interest attracts 30% TDS until account redesignated — do not assume 10% Section 194A rate.
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vs Section 193?
194A is non-securities interest; 193 is interest on securities.
Form 15H?
Senior 60+ — no TDS if total income below exemption limit.
80TTB?
Senior 60+ — deduct INR 50,000 interest in ITR even if TDS deducted.
NRO FD?
30% TDS until redesignation — then 10% under 194A.
Co-op bank?
Same 194A rules — submit 15G/H to branch.
DTAA?
Resident interest typically no DTAA — NRO pre-return may use treaty on NRO guide.
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