As per section 206AA introduced by Finance (No. 2) Act, 2009 effective April 01, 2010, every person who receives income on which TDS is deductible shall furnish his PAN, failing which TDS shall be deducted at the rate of 20% in case of Domestic deposits and 30.90% in case of NRO deposits. Additionally, in the absence of PAN, Form 15G/H and other exemption certificates will be invalid even if submitted & penal TDS will be applicable.
If you have FDs that earn more than 10 thousand rupees per annum then you need to pay TDS on interest earned above 10 thousand at the rate of 10%. By submitting form 15G/H you can stop the bank from deducting this TDS.
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