Retired, or supporting retired parents? The TDS change explained

Two separate changes have landed close together. First: the TDS-free threshold on bank and post office interest was raised for FY 2025-26 onward — to ₹50,000 for everyone, and ₹1,00,000 for senior citizens (60 and above), up from ₹40,000 and ₹50,000 respectively. Banks only start deducting TDS once a senior citizen's total interest from that bank crosses ₹1,00,000 in a year.

Second: from 1 April 2026, the separate Form 15G (for those under 60) and Form 15H (for senior citizens) are merged into a single Form 121 under the new Income Tax Rules, 2026. Worth knowing: Form 15H had a quirk that let senior citizens with gross income above the exemption limit still submit it, as long as deductions brought net tax to zero. Early guidance suggests Form 121 may not carry that flexibility forward — so it's worth double-checking eligibility rather than assuming the old logic still applies.

Who this affects: senior citizens with fixed deposits, recurring deposits, or other bank/post office interest income, and anyone managing a retired parent's bank paperwork on their behalf.

What to do: check the actual interest earned across all FDs at each bank — the ₹1,00,000 threshold applies per bank, not in aggregate, so spreading deposits across two or three banks can genuinely keep you under the limit at each one. If total taxable income is below the exemption limit, submit the new Form 121 once your bank has it available. If TDS is still deducted despite low income, file a return to claim it back as a refund.