Microlesson · 5-min read

Section 194A — Interest other than Interest on Securities

# Section 194A — TDS on Interest (other than on Securities)

## Who deducts?

Payer: Any person except an Individual / HUF whose business turnover ≤ ₹1 cr or profession gross receipts ≤ ₹50 L in the immediately preceding FY.
Payee: Resident person.

## Threshold

Interest paid by	Senior Citizen	Others
Bank / Co-op Bank / Post Office on time deposit	₹1,00,000 p.a.	₹50,000 p.a.
Any other person	₹10,000 p.a. (default)	₹10,000 p.a.

(Senior citizen ≥ 60 years.)

## Rate

10%.

## Notes

Applies to interest on FDs, RDs, loans from one person to another (non-bank), unsecured loans, etc.
Does NOT apply to interest on securities (covered by Sec 193).

Worked example

### Example 1

Example: SBI pays ₹60,000 interest on FD to Mr. A (age 45). TDS u/s 194A @ 10% = ₹6,000 (threshold ₹50,000 exceeded).

### Example 2

Example: A Pvt Ltd Co. pays ₹15,000 as interest on an unsecured loan to Mr. B. TDS = 10% of ₹15,000 = ₹1,500 (threshold ₹10,000 exceeded).

Applying the ₹50,000 / ₹1,00,000 threshold for interest paid by parties other than banks / post offices.
Small individuals / HUF (below 44AB limits) wrongly deducting TDS on interest — they're exempt as deductors.

Reference: 194A

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