TDS getting deducted after submission of 15H at IDFC

[Purnima]

For my senior citizen mom's savings account at IDFC, I see that they have started deducting TDS even though we submitted Form 15H in April 2024.
It seems that the total interest is going to be more than the 3L limit for senior citizens for FY24-25.

However, the surprising part is that the bank has started withholding the TDS in May 2024 way before she has earned the interest.
Basically, they are ignoring the 15H and deducting TDS at 10% for ALL the interest.

Questions-
1. Is this the RBI guidelines and do all banks do the same? Or is IDFC special?
2. She will eventually get this back after filing taxes because of other deductions. But it is still a loss as the deducted money is not earning interest till she gets the refund next year. Any ideas (except opening another bank account at another bank) to stop this from happening?

I am not trying to commit any tax fraud here.
Just trying to understand how to do better tax planning.

 

[Anindya98]

For my senior citizen mom's savings account at IDFC, I see that they have started deducting TDS even though we submitted Form 15H in April 2024.
It seems that the total interest is going to be more than the 3L limit for senior citizens for FY24-25.

However, the surprising part is that the bank has started withholding the TDS in May 2024 way before she has earned the interest.
Basically, they are ignoring the 15H and deducting TDS at 10% for ALL the interest.

Questions-
1. Is this the RBI guidelines and do all banks do the same? Or is IDFC special?
2. She will eventually get this back after filing taxes because of other deductions. But it is still a loss as the deducted money is not earning interest till she gets the refund next year. Any ideas (except opening another bank account at another bank) to stop this from happening?

I am not trying to commit any tax fraud here.
Just trying to understand how to do better tax planning.

following this thread

 

[Raavan]

withholding the TDS in May 2024

Where did you check? Form 26AS?

even though we submitted Form 15H in April 2024.

Did you receive confirmation from bank in any form? Like SMS or mail or physical acknowledgement?

Any ideas (except opening another bank account at another bank) to stop this from happening?

Mail the bank with the form 15H submission proof and proof that they deducted TDS and ask them to rectify.

 

[Purnima]

Where did you check? Form 26AS?

The monthly statement shows the TDS deducted for each FD.

Did you receive confirmation from bank in any form? Like SMS or mail or physical acknowledgement?

Yes, I have email confirmation.
Also, tried submitting again to make sure i didn't miss it and got the error that 15H is already submitted for this year.

Mail the bank with the form 15H submission proof and proof that they deducted TDS and ask them to rectify.

I messaged the RM but he is clueless (as expected).

The reason I started this thread is to figure if this is the norm across all banks or if IDFC is doing something special here.
I will have to cancel and move some FDs to another bank but I am also sure even if I bring the expected interest below the 3L limit, they will not be able to fix this.

 

[rextg]

For my senior citizen mom's savings account at IDFC, I see that they have started deducting TDS even though we submitted Form 15H in April 2024.
It seems that the total interest is going to be more than the 3L limit for senior citizens for FY24-25.

However, the surprising part is that the bank has started withholding the TDS in May 2024 way before she has earned the interest.
Basically, they are ignoring the 15H and deducting TDS at 10% for ALL the interest.

Questions-
1. Is this the RBI guidelines and do all banks do the same? Or is IDFC special?
2. She will eventually get this back after filing taxes because of other deductions. But it is still a loss as the deducted money is not earning interest till she gets the refund next year. Any ideas (except opening another bank account at another bank) to stop this from happening?

I am not trying to commit any tax fraud here.
Just trying to understand how to do better tax planning.

The TDS limit is 40k for general and 50k for senior citizen. However if your income is less than taxable then you can submit 15G/H to get refund. If they don't refund then you can file income tax and get refund for the TDS deducted.
I am not sure but after searching online this is what I have found.
Even for my mother TDS deducted and after filling 15g they didn't refund. Now I am going to file itr to get refund.

 

[Purnima]

15H is submitted and I can see the TDS getting deducted on the interest certificate too.
The total income in FY24-25 is only 11000 and yet, TDS has been deducted.

Can others please check their interest statement with IDFC and see if they are seeing anything similar?
Could this be problem with their system itself.

 

[Fini7777]

For my senior citizen mom's savings account at IDFC, I see that they have started deducting TDS even though we submitted Form 15H in April 2024.
It seems that the total interest is going to be more than the 3L limit for senior citizens for FY24-25.

However, the surprising part is that the bank has started withholding the TDS in May 2024 way before she has earned the interest.
Basically, they are ignoring the 15H and deducting TDS at 10% for ALL the interest.

Questions-
1. Is this the RBI guidelines and do all banks do the same? Or is IDFC special?
2. She will eventually get this back after filing taxes because of other deductions. But it is still a loss as the deducted money is not earning interest till she gets the refund next year. Any ideas (except opening another bank account at another bank) to stop this from happening?

I am not trying to commit any tax fraud here.
Just trying to understand how to do better tax planning.

This is a regular practice to some banks They deduct TDS even after submitting Form 15H

This might happen to you due to the following reasons:
1. if the bank expects the interest income to exceed the limit based on the provided information, they may still deduct TDS.
2. Any errors in form 15H.
3. if the total income >3L and interest projected >50000 according to AIS, Form 26AS, Form 16: I assume you've cross-verified all these forms before submitting form 15H.

To stop this:
1. Split Deposits across other Banks- You mentioned not to include this But there's no other option as of my Knowledge 🤣
2. Ensure that Form 15H is filled accurately and resubmitted if there are significant changes in income expectations. Misunderstanding or errors in the declaration can lead to unnecessary TDS deductions.

Or claim the refund after filing ITR (Forget about loss of interest on deducted money)

Questions-
1. Is this the RBI guidelines and do all banks do the same? Or is IDFC special?
Ans. These rules are governed by Income Tax Act Not decided by RBI and Not specifically IDFC many banks follow this

 

[APT]

For my senior citizen mom's savings account at IDFC, I see that they have started deducting TDS even though we submitted Form 15H in April 2024.
It seems that the total interest is going to be more than the 3L limit for senior citizens for FY24-25.

However, the surprising part is that the bank has started withholding the TDS in May 2024 way before she has earned the interest.
Basically, they are ignoring the 15H and deducting TDS at 10% for ALL the interest.

Questions-
1. Is this the RBI guidelines and do all banks do the same? Or is IDFC special?
2. She will eventually get this back after filing taxes because of other deductions. But it is still a loss as the deducted money is not earning interest till she gets the refund next year. Any ideas (except opening another bank account at another bank) to stop this from happening?

I am not trying to commit any tax fraud here.
Just trying to understand how to do better tax planning.

what's the outcome now?

 

[Purnima]

I have escalated to the PNO and they are researching this.
In the meantime, I have also closed some of the FDs from this account to reduce the annual interest.

I am sure they will ignore the interest reduction and continue to deduct the TDS even when the total interest in under limit.
And I will have to close all FDs and move the money to another bank, at least for this year. 🙁

 

[xvd1]

Faced somewhat similar issue with ICICI where they deducted TDS but haven't paid it against PAN. Branch has no clue what to do. This being one of the biggest banks in India!

 

[CosmicCat]

Had a similar issue with my dad's two SCSS accounts with ICICI Bank, which were opened in Jan '25. He submitted the Form 15H (For FY 2024-25) for both of them at his base branch within a few days after opening them, and it was even acknowledged with an SR number in the email.

Fast forward to 02-Apr-2025, my father noticed that he got the interest amount for both the SCSS deposits, however they deducted a total TDS of around ₹2.5K, which was weird, since:

1. The Form 15H was already submitted for the FY 2024-25, and the interest was credited for only one quarter, so there was no way the total interest amount in the whole FY could have exceeded ₹50K, which was the last FY's threshold limit.
2. They credited the interest for the Jan-Mar '25 quarter — which fell in the FY 2024-25 — in FY 2025-26 (As opposed to PSU banks, who credit on 31st March itself or at a back date in the previous FY, if credited in April, to account for that financial year). So, their systems considered its interest falling under FY 2025-26 instead of FY 2024-25, whose Form 15H wasn't submitted at the time the interest was credited (It was the second day of the Financial Year, dude!) and hence they deducted the TDS as it would have exceeded ₹1L for this year.

So, he immediately escalated the issue to the State Head's professional email address (HisFirstName.LastName@icicibank.com). And within an hour, he responded personally, and within two hours, he got a call from the Branch Manager who sent someone from the branch at our home to collect the Form 15H for the current financial year, and assured him that the TDS would be refunded within two business days.

Today, 06-Apr-2025, my dad got the whole TDS refunded by the Bank. 🙂