Form 15G, Form 15H to Save TDS on Interest Income

 

Generally, banks deduct TDS on investments under section 194A of the IT Act if the interest earned by the investor is more than INR 40,000 per financial year. For senior citizens, this limit is INR 50,000. However, if the total annual income of an individual is not taxable, the person can apply to the bank requesting that TDS not be deducted from the interest income earned.

What is Form 15G?

Form 15G is a self-declaration form that individuals holding a fixed deposit (FD) can submit to the bank where they have the FD to make sure that no TDS is deducted from their FD interest income for the particular fiscal year. This form is available for people who are below 60 years of age and for Hindu Undivided Families or HUFs. Form 15G is available u/s 197A of the IT Act, 1961, and it allows taxpayers to request banks not to deduct TDS on their interest income by declaring their annual income.

What is Form 15H?

Like Form 15G, Form 15H is again a self-declaration form. However, this form allows senior citizens of 60 years and above to avoid TDS in the interest of investments, such as submitting form 15G for FD and RD, etc. This form again comes u/s 197A of the IT Act under subsection 1C. By submitting this declaration, senior citizens can avail of their investments in full, including complete interest amount on deposits without any TDS deductions.

Features of Form 15G and Form 15H

1. Form 15G

• Form 15G can be submitted by taxpayers below 60 years of age, including HUFs
• Form 15G can be submitted before your bank pays the tax interest
• 15G should be submitted to all branches of your banks where you hold deposits that are likely to bear your interest amount
• You are eligible to submit Form 15G if your income doesn’t come under the slab of tax liability for the particular FY
• The option of Form 15G is available for Indian residents only

2. Form 15H

• Form 15H is available for citizens who are 60 years and above
• The taxable income should be up to the maximum exempt for the FY
• Like in Form 15G, you must submit Form 15H declaration at every branch of your bank where you have an investment/deposit
• You may submit form 15H at the time of investing the deposit to avoid delay in getting money
• Form 15H is required in case of bank deposits offering interest of more than INR 10,000 for an FY
• In case the interest from bonds, etc., goes beyond INR 5000 in an FY
• Example and Important Points to Better Understand Form 15G, 15H, and Who can Submit

Example and Important Points to Better Understand Form 15G, 15H, and Who can Submit

Age	30 Years	50 Years	62 Years	81 years
Salary	INR 1,20,000	INR 1,20,000	-	-
Pension	-	-	INR 1,20,000	INR 2,00,000
FD interest income	INR 1,05,000	INR 2,60,000	INR 2,80,000	INR 3,30,000
Total income before deductions u/s 80	INR 2,25,000	INR 7,10,000	INR 4,00,000	INR 5,30,000
Deductions available u/s 80	INR 24,000	INR 1,30,000	INR 1,00,000	INR 55,000
Taxable income	INR 2,01,000	INR 5,80,000	INR 300,000	INR 475,000
Minimum exempt available	INR 2,50,000	INR 2,50,000	INR 300,000	INR 500,000
Age	Below 60	Below 60	Above 60	Above 60
NIL tax on income	Yes	No	Yes	No
Interest earned is below the basic limit of exemption	Yes	No	-	-
Eligible for Form 15H, 15G	Form 15G	Not eligible	Form 15H	Form 15H

Form 15G and 15H Difference

Criteria	Form 15G	Form 15H
Applicable on	Form 15G can be submitted by any individual resident Indian (not company)	Form 15H can also be submitted only by resident Individuals
Age Limit	Applies to individuals less than 60 years of age	This applies to senior citizens 60 years and above
Provision under the Income Tax Act	As per Section 197A (1) and (1A)	As per Section 197A (1C)

 

When to Submit Form 15G and Form 15H?

Both 15G and 15H Forms are applicable for one financial year only. Hence, one must submit these forms at the start of every financial year to ensure no TDS is deducted by the bank TDS from your interest income.

Where can you Submit Form 15H and 15G Apart from Banks?

Other than banks, you can submit Form 15G and 15H in the following cases:

• To avoid deduction of TDS on EPF balance (Form 15G for PF withdrawal if the PF amount is withdrawn before continuous service of 5 years), you can submit a 15G Form to EPFO
• To avoid deduction of TDS on corporate bonds income if it exceeds INR 5,000
• To avoid deduction under Post Office Deposits
• To avoid TDS on rent if it exceeds INR 2 lakh 40 thousand per year
• To avoid TDS on commission of insurance exceeding INR 15,000 per FY

What Details to Offer While Filling Form 15G and Form 15H Online? 

Here’s how to fill Form 15G with different required details:

• Name and PAN
• Tax status – If you are filing tax as an individual, HUF, or trust
• Previous year (for which the form is being submitted)
• Place of residence in the previous year
• Address and contact details of residence in the previous year
• Submit the last year when your taxable income exceeded the maximum limit of exemption in the past 6 years
• Mention the most recent year when your annual earnings were above the taxable limit
• Mention the assessed income for which you already made the declaration
• Calculate total income from all sources
• Details of Form 15G (or 15H) filed in the PY, etc.

What Happens if you Don’t Remember to Submit Form 15G or Form 15H?

If a taxpayer fails to submit Forms 15G and 15H on time, the bank may deduct TDS. In such a case, below are the options you have:

• You can file an ITR to claim a refund of TDS from the income tax department, as banks and other financial institutions can’t refund TDS
• Submit Form 15G and Form 15H at the earliest to avoid TDS for the remaining financial year.