Finance Minister Sh Piyush Goyal has proposed in Budget 2019 to increase the threshold limit for TDS on Interest u/s 194A from Rs. 10,000 to 40,000 in respect of interest payments by banks/ post offices on term/ fixed/ recurring deposits from FY 2019-20/ Ay 2020-21.
Accordingly, the words “ten thousand” appearing in Section 194A(3)(i) of the Income-tax Act, 1961 shall be substituted with the words “forty thousand” from FY 2019-20/ Ay 2020-21.
This will benefit small depositors, housewives, senior citizens, pensioners, etc. who are dependent on interest income from smalls savings deposited with banks/ post offices.