INDEX
- Form 15G &15H to save interest income
- TDS Deduction on Interest Income
- What are Form 15G & 15H
- Conditions for Submitting Form 15G and Form 15H
- What to Do If You Forgot to Submit Form 15G or Form 15H?
- Where Can You Submit Form 15G or Form 15H Apart from Banks?
- How to Fill Form 15G?
Form 15G & Form 15H
Form 15G and Form 15H to Save TDS on Interest Income
If your total income is below the taxable limit and you wish to prevent the bank from deducting TDS (Tax Deducted at Source) on your interest income, you can submit Form 15G or Form 15H to the bank.
TDS Deduction on Interest Income
Banks are required to deduct TDS under Section 194A of the Income Tax Act if your interest income exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). The bank calculates this TDS threshold by aggregating the interest income across all branches where you hold accounts.
If your total income is below the taxable limit, you can submit:
Form 15G: For individuals under 60 years of age.
Form 15H: For senior citizens aged 60 and above.
By submitting these forms, you request that no TDS be deducted from your interest income.
What Are Form 15G and Form 15H?
Both Form 15G and Form 15H are self-declaration forms submitted to banks to declare that your income is below the basic exemption limit, and thus, no TDS should be deducted.
Key Differences:
Form 15G: Applicable to residents below 60 years, HUFs, trusts, or other assessees (excluding companies or firms).
Form 15H: Specifically for senior citizens aged 60 years and above.
Note: Providing your PAN is mandatory for both forms. Some banks allow online submission through their websites.
Conditions for Submitting Form 15G and Form 15H
1. Form 15G
The Final tax on your total income should be nil.
Your total income (including interest) for the financial year must be below the basic exemption limit (₹2.5 lakh under the old tax regime or ₹3 lakh under the new regime for FY 2023-24).
2. Form 15H
The tax calculated on your total income should be nil.
Senior citizens can submit this form even if interest income exceeds the exemption limit, provided their taxable income (after deductions) remains below the exemption threshold.
Example to Understand Eligibility for Form 15G and Form 15H
| Age | Salary | Pension | FD Interest Income | Total Income | Deductions | Taxable Income | Basic Exemption Limit | Eligible | Form to Submit |
|---|---|---|---|---|---|---|---|---|---|
| 50 years | ₹1,80,000 | – | ₹85,000 | ₹2,65,000 | ₹45,000 | ₹2,20,000 | ₹2,50,000 | Yes | Form 15G |
| 21 years | – | – | ₹2,60,000 | ₹2,60,000 | ₹30,000 | ₹2,30,000 | ₹2,50,000 | No | Cannot submit |
| 65 years | – | ₹1,00,000 | ₹1,80,000 | ₹2,80,000 | ₹10,000 | ₹2,70,000 | ₹3,00,000 | Yes | Form 15H |
| 68 years | – | – | ₹3,30,000 | ₹3,30,000 | ₹55,000 | ₹2,75,000 | ₹3,00,000 | Yes | Form 15H |
Important Points to Remember:
Resident Status: Only residents can submit Form 15G or Form 15H. Non-residents are not eligible.
Senior Citizens: Senior citizens can submit Form 15H even if their interest income exceeds the exemption limit, provided taxable income is below the threshold.
Submission Time: Submit these forms annually at the beginning of the financial year to avoid TDS for the entire year.
What to Do If You Forgot to Submit Form 15G or Form 15H?
If you missed submitting the forms and your bank has already deducted TDS, here’s what you can do:
File Your Income Tax Return (ITR): Claim a refund for excess TDS by filing your ITR. The Income Tax Department will process the refund after verifying your return.
Submit Form 15G or Form 15H Immediately: Prevent further TDS deductions by submitting the forms as soon as possible. You can still claim a refund for the deducted TDS by filing your ITR.
Where Else Can You Submit Form 15G or Form 15H?
Besides banks, these forms can be submitted for:
EPF Withdrawal: Prevent TDS on EPF withdrawals exceeding ₹50,000 before 5 years of continuous service, provided your tax liability is nil.
Corporate Bonds: Submit the forms if income from corporate bonds exceeds ₹5,000.
LIC Maturity Proceeds: Prevent TDS on LIC policy maturity proceeds exceeding ₹1 lakh, if your tax liability is nil.
Post Office Deposits: Avoid TDS on interest from post office deposits if income is below the taxable limit.
Rent: Prevent TDS if annual rental income exceeds ₹2.4 lakh and your taxable income is below the exemption limit.
Insurance Commission: Submit the forms if insurance commission income exceeds ₹15,000.
Dividend Income: Prevent TDS on dividend income exceeding ₹5,000.
How to Fill Form 15G?
Personal Information: Provide name, PAN, and address as per income tax records.
Residential Status: Tick “Resident,” as non-residents cannot use this form.
Income Details: Enter total income from all sources, including interest income. Aggregate income if submitting multiple forms.
Sign and Submit: After completing the form, sign and submit it to the concerned deductor (bank, insurance company, etc.).
Important Notes:
Do not submit Form 15G if income needs to be clubbed with another person’s (e.g., spouse or child).
Ensure PAN details are correct to avoid unnecessary TDS.
By understanding and utilizing Form 15G and Form 15H effectively, you can avoid unnecessary TDS deductions and enhance your tax efficiency.