TDS on Fixed Deposit Interest – Rules for Co-op Banks (FY 2025–26)
From FY 2025–26, co-operative banks must adhere to the updated provisions of Section 194A under the Income Tax Act, governing TDS on interest (excluding interest on securities). With revised thresholds and stricter compliance expectations, banks must ensure accurate deduction, timely deposit, and robust documentation especially under Core Banking Systems (CBS). This guide outlines everything you need to know — thresholds, TDS rates, Form 15G/15H handling, and your compliance checklist.
Updated Thresholds Table (Section 194A)
What Every Co-operative Bank Needs to Know
With banking operations centralized under Core Banking Systems, co-operative banks are responsible for tracking cumulative interest across all branches and ensuring TDS deduction under the correct threshold and rate. Additionally, with increased thresholds for FY 2025–26 and scrutiny by tax authorities, banks must streamline their process of collecting Form 15G/15H, maintaining TDS registers, and timely filing Form 26Q and issuing 16A certificates.