Form 15G and Form 15H: How to save TDS on interest income? 


Form 15G & Form 15H - How to fill form 15G?

What is Form 15G?

Form 15G is a declaration form filled out by all bank deposit holders (individuals or HUF members) below 60 years of age to ensure that no TDS (Tax Deduction at Source) is deducted from their interest income in a year. Here, bank deposits include all fixed deposits, recurring deposits etc. 

As per the income tax rules, it’s mandatory for banks to deduct tax at source (TDS) in case the interest earned on your bank deposits is more than Rs. 40,000 in a financial year as updated at the start of FY 2019-20. Earlier the exemption limit was Rs. 10,000.

( Read more: TDS or Tax Deduction at Source)

What is Form 15H?

Form 15H is a declaration form filled out by all bank deposit holders (only individuals and not HUF members) at least 60 years of age to ensure that no TDS (tax deduction at source) is deducted from their interest income in a year. In this case, bank deposits include all fixed deposits, recurring deposits etc. as well. 

Where to get Form 15G? 

  1. Bank Websites: Form 15G can be easily downloaded for free from the website of all major banks in India.
  2. EPFO portal: One can also download Form 15G form the official EPFO portal.
  3. Income Tax Portal: Form 15G can also be easily downloaded from the Income Tax Department website at https://www.incometaxindiaefiling.gov.in/home

You also have the facility to submit form 15G online on the website of most major banks of India.

Eligibility conditions to fill Form 15G

Here’s the eligibility criteria one must fulfill to submit Form 15G:

  1. You are an Individual or HUF (other than company or a firm).
  2. You need to be a resident Indian for the applicable financial year
  3. Your age should not be more than 60 years
  4. Tax liability calculated on the total taxable income for the financial year is zero
  5. Total interest income for the financial year is less than the basic exemption limit which is Rs. 2.5 lakhs for FY 2020-21.

Eligibility conditions to fill Form 15H

Here’s the eligibility criteria one must fulfill to submit Form 15H:

  1. You are an individual and not a HUF or a company.
  2.  You need to be a resident Indian for the applicable financial year.
  3. Your age should be at least 60 years old ie. you should be a senior citizen or will be during the year for which you are submitting the form.
  4. Total interest income for the financial year can be more or less than the basic exemption limit which is Rs. 2.5 lakhs for FY 2020-21.In case of form 15H, it doesn’t matter.
  5. Tax liability calculated on the total taxable income for the financial year is zero.

How to fill Form 15G?

Form 15G has two sections. The first part is for the individual who wants to claim no-deduction of TDS on certain incomes. The second part is meant to be filled out by the deductor, be it the bank or any other financial institution that will submit the tax deducted at source (TDS) to the government. Here are the key details you need to fill out in the first portion of Form 15G:

1) Name of the Assessee (Declarant) – Name as mentioned on your PAN Card.

2) Permanent Account Number (PAN) – Valid PAN card is mandatory to file the form. If you fail to furnish valid PAN details, your declaration will be treated as invalid.

3)  Your status – This form can be furnished by an individual, HUF but not by a firm or company.

4) Previous year – You need to select the previous year as the financial year for which you are claiming non-deduction of TDS.

5) Residential status – You need to be a residential citizen of India to submit form 15G. Fill in your residential status as resident individual because NRIs are not allowed to submit this form.

6-12) Address – Mention your communication address correctly along with PIN code.

13-14) Contact Information – Fill out a valid email ID and contact number for further communications.

15) Previous Year Assessment – Check on “Yes”, if you were assessed to tax under the provisions of Income Tax Act, 1961 for any of the previous assessment years. If “yes” then mention the latest assessment year for which your returns were assessed.

16) Estimated income for which you are making a declaration – Here, you need to mention the estimated income for which you are making a declaration. 

17) Total Income- Total estimated income for the financial year (which includes all the income)

18) Details of All Previous Form 15G: In case you have already filed Form 15G anytime during the financial year, then the details of all the previous declarations along with the aggregate amount of income need to be mentioned in the current  form 15G declaration.

19) Details of income for which the declaration is filed: Fill in the investment details for which you are filing this particular Form 15G declaration. You need to mention the investment account number (term deposit/ life insurance policy number etc.).

After finishing this first part you can recheck all the details to ensure that the declaration is error free. As mentioned above, the second part of Form 15G is to be filled out by the deductor who is going to deposit the tax deducted at source to the government on behalf of you (or the tax assessee). Your job of filling out the Form 15G is done.

When can Form 15G be submitted?  

Here’s a list of scenarios in which one can can submit the declaration of Form 16G to lessen their TDS burden:

1. TDS on Interest from Bank Deposits (FD & RD)

Banks will deduct TDS if the interest amount on bank deposits (fixed deposit or recurring deposit) is more than Rs. 40,000 in a year as of now. Before FY 2019-20, this threshold was Rs. 10,000 annually. However, if the taxpayer is eligible for the form, then he/she can submit Form 15G and prevent the TDS deduction.

(Read More: Fixed Deposit)

2. TDS on EPF or Employees’ Provident Fund Withdrawal

If EPF or Employees’ Provident Fund is withdrawn before completing 5 years with the current organization, TDS is applicable on the income. But even in this case, if your total taxable income including the provident fund withdrawal balance is 0, then you can submit Form 15 G to prevent the deduction of TDS.

(Read More: EPF or Employees’ Provident Fund)

3. TDS on Rent

If the rent for a given financial year exceeds Rs. 8 lakh, the income is subject to TDS. However, if the taxable income is lower than the basic exemption limit, and then you can submit Form 15 G to stop the deduction of TDS.

4. TDS on Interest from Post Office Deposits

If you fulfil all the conditions to submit Form 15G, post office which provides deposit service also accept Form 15 G declarations for your post office deposits and national savings schemes.

5. TDS on commissions from Life Insurance Policy

If the maturity proceeds from life insurance policy exceeds Rs. 1 lakh, such proceeds are subjected to TDS. However, if the taxpayer is eligible for Form 15G, then he/she can submit Form 15G to the life insurance company and stop the TDS deduction.

6. TDS on Income earned from Corporate bonds and Debentures

Income from corporate bonds and debentures exceeding Rs. 5,000 for a financial year is subjected to TDS or tax deducted at source. In this case, if you are eligible to submit Form 15G, you can do so and request the issuer of bonds to not deduct TDS.

What is the difference between Form 15G and Form 15H?

 

Form 15G

Form 15H

   

Submitted by individuals who are less than 60 years old.

Submitted by individuals who are either 60 years or more.

It can be submitted by individuals as well as Hindu Undivided Family (HUF).

It can be only submitted by individuals.

Only applicable to individuals or HUFs with an annual income lower than the basic exemption limit (2.5 lakh for 2019-20).

Any senior citizen can submit the form irrespective of the amount of their annual income.

 

Forgot to submit Form 15G or Form 15H?

Many taxpayers forget to submit Form 15G and Form 15H on time. Here’s what you can do if you’ve forgotten to submit your form and your TDS has already been deducted:

1. File your Income Tax Return (ITR) to claim refund of TDS

Filing your Income Tax Return or ITR is one surest way to seek a refund of excess TDS deducted. Banks or other deductors cannot refund TDS to you because they have already deposited it to the income tax department. Your excess TDS deducted will be refunded to you by the Income tax department when you file an income tax return

2. Submit Form 15G and Form 15H immediately

Most banks deduct TDS every quarter on your fixed or recurring deposit. If you forgot to submit Form 15G or Form 15H, you should try to submit it at the earliest so that no TDS is deducted for the left over financial year.

Penalty for submitting a false declaration by using Form 15G

Committing fraud when it comes to declaring your Form 15G is not a good idea. Here’s what can happen if you provide a false declaration in Form 15G just to avoid TDS

  1. Fine –  False declaration of form 15G can lead to fine under Section 277 of the Income Tax Act, 1961.
  2. Imprisonment –  False declaration of the form can also lead to imprisonment for a period of 6 months to 7 years if wrong declaration was provided to evade tax of more than Rs. 1 lakh. For all other cases, imprisonment between 3 months to 3 years.

Hence, you should be careful when submitting your Form 15G declaration and should do it only if you are eligible to do so.

Written by

Priyanshi Bhardwaj