TDS on Post Office Interest: When It Applies and How Form 15G/15H Works (2026)
Post office savings schemes are popular precisely because they are simple and government-backed — but the tax treatment is not uniform across them, and a lot of depositors are surprised when interest arrives smaller than expected. This guide explains when India Post deducts tax at source, who can stop that deduction with Form 15G or 15H, and how to fix it if it has already happened.
What TDS actually is
TDS is not an additional tax. It is tax collected in advance: the post office withholds a portion of your interest, deposits it against your PAN, and reports it. When you file your return, that amount shows up as credit already paid. If your total tax liability is lower than what was deducted, the difference is refunded to you.
The practical problem is cash flow and paperwork, not the tax itself. If your income is below the taxable limit, you should not have tax withheld at all — and that is what Form 15G and 15H are for.
Which schemes attract taxable interest
Whether TDS can arise depends on how the scheme is taxed, not on the post office. Broadly:
| Scheme | Interest taxable? | TDS possible? |
|---|---|---|
| Public Provident Fund (PPF) | Exempt | No |
| Sukanya Samriddhi Yojana (SSY) | Exempt | No |
| Post Office Savings Account | Taxable above a separate exemption for savings interest | Not usually deducted |
| Time Deposit (TD) | Taxable | Yes, above the threshold |
| Senior Citizen Savings Scheme (SCSS) | Taxable | Yes, above the threshold |
| Monthly Income Scheme (POMIS) | Taxable | Yes, above the threshold |
| National Savings Certificate (NSC) | Taxable (accrued) | Generally not deducted at source |
| Kisan Vikas Patra (KVP) | Taxable on maturity | Generally not deducted at source |
⚠️ Check the current figure: TDS thresholds and rates are set by the Finance Act and are revised from year to year, with a separate, higher threshold for senior citizens. Confirm the limit that applies to your financial year on the India Post savings schemes page or the National Savings Institute or with the Income Tax Department before assuming a deduction was wrong.
Form 15G vs Form 15H — which one is yours
| Form 15G | Form 15H | |
|---|---|---|
| Who | Resident individual below 60, HUF, trust | Resident individual aged 60 or above |
| Core condition | Estimated total income for the year is below the taxable limit, and total interest is below the basic exemption limit | Estimated tax on total income for the year is nil |
| Non-residents | Not eligible | Not eligible |
| PAN | Mandatory | Mandatory |
| Validity | One financial year | One financial year |
The distinction matters: Form 15H has an easier test. A senior citizen only needs their final tax liability to be nil, which can include the effect of deductions. Form 15G additionally requires total interest income to stay under the basic exemption limit, so a person below 60 with large interest income may not qualify even if deductions bring their tax to zero.
How to submit it, step by step
- Do it at the start of the financial year — in April, before the first interest credit. A declaration submitted after tax has been deducted does not reverse it.
- Submit at every post office where you hold a deposit. The declaration is branch-level, not PAN-level. Holding SCSS at one office and a TD at another means two forms.
- Carry your PAN and your passbook or deposit receipt. Without a valid PAN the declaration is void and tax is deducted at the higher no-PAN rate.
- Declare all your income honestly. The form is a legal declaration; filing one when your income is in fact taxable carries penal consequences.
- Keep the acknowledgement. If TDS is deducted anyway, the stamped copy is your evidence when you take it up with the office.
- Repeat next April. Nothing carries forward.
If TDS has already been deducted
The post office cannot return it — the money is with the Income Tax Department, not the branch. The route back is your income tax return:
- Check Form 26AS and the Annual Information Statement (AIS) on the income tax portal; the deduction should appear against your PAN.
- Report the interest as income and claim the TDS as credit already paid.
- Any excess is refunded after your return is processed.
If the deduction does not appear against your PAN, that is worth raising with the post office promptly — it usually means the PAN in your KYC record is missing or wrong, which also means the higher no-PAN rate may have been applied.
Common mistakes worth avoiding
- Filing once and assuming it lasts. It expires every 31 March.
- Filing at one office only. Each office deducts on the deposits it holds.
- Using 15G when you are 60 or over. Use 15H — the eligibility test is easier.
- Filing to avoid tax you actually owe. It is a declaration, not a loophole.
- Stale KYC. An outdated PAN quietly triggers the higher deduction rate.