Form 15G and 15H to save TDS on Interest Income Last Updated : 30 May 2020

Individuals with their total income below the taxable limit can submit Form 15H and Form 15G to the bank and ask them to not deduct TDS on the amount of interest. These forms help claim receipts without any tax deduction.

The banks in India have to deduct TDS when the interest income of an individual is more than Rs.10,000 a year. The bank includes deposits held in all branches to determine this limit. In case an individual’s total income is below the taxable limit, he/she can submit a Form 15G and Form 15H to the bank to request them not to deduct TDS on the interest amount.

Form 15H

Form 15H is a declaration under sub-section (1C) of section 197A of the Income Tax Act, 1961, to be made by an individual of the age of 65 years or more to claim certain receipts without deduction of tax. The eligibility criteria to submit this declaration is listed below:

  • Form 15H can only be submitted by individuals who have attained the age of 65 years at the time of submission. (The age limit has been reduced to 60 from 1st July, 2012).
  • The estimated tax for the previous year should be zero. The individual should not have paid tax in the previous year because his/her income should be below the taxable amount.
  • The individual should submit this form to all deductors to whom a loan was advanced, i.e., this form will need to be submitted to each bank branch through which the individual is collecting interest.
  • Form 15H should be submitted to the bank before the payment of the first interest. This is not compulsory, but it will prevent the bank from deducting the TDS.
  • Form 15H will need to be submitted to the banks if the interest from one branch exceeds Rs.10,000 a year.
  • Form 15H will require to be submitted if the interest income from any source other than a deposit, such as, interest on a loan, advance, debentures, bonds, etc. exceeds Rs.5,000 annually.

Form 15G

Form 15G is a declaration under sub-sections (1) and (1A) of section 197A of the Income Tax Act of 1961, to be made by an individual (not being a company or firm) claiming certain receipts without the deduction of tax. The eligibility criteria to submit this form has been listed below:

  • Form 15G can be submitted by individuals below the age of 65 years or by a Hindu Undivided Family (HUF).
  • Form 15G should be submitted before the first payment of interest on a fixed deposit.
  • The individual should submit this form to all deductors to whom a loan was advanced, i.e., this form will need to be submitted to each bank branch through which the individual is collecting interest.
  • This form can only be submitted by individuals whose tax payable on their total income is zero.
  • The individual should be a resident Indian.
  • The total interest income is less than the minimum exemption amount for that year. The minimum exemption amount for the year 2015-16 is Rs.2,50,000.

Purposes for submitting Form 15G/15H

Form 15G and Form 15H are usually submitted to banks to prevent the deduction of TDS on interest, these forms can also be submitted for a few other reasons:

  • TDS for EPF withdrawal.

    There is a deduction of TDS on EPF if an individual withdraws their EPF before completion of 5 years of continuous service. If an individual has an EPF balance of more the Rs.50,000 and wishes to withdraw it before completion of 5 years of continuous service, he/she may submit a Form 15G/15H.

  • TDS on income generated from corporate bonds.

    An individual is eligible for a deduction of TDS from corporate bonds if the income generated from them exceeds Rs.5,000.

  • TDS on income from post office deposits.

    Digitized post offices also conduct TDS and will accept Form 15G/15H if the individual meet the eligibility criteria.

  • TDS on rent.

    There is a deduction of TDS on rent if the total rental payment for a year exceeds Rs.1.8 lakhs. If the individual’s total income is nil, he/she can submit Form 15G/15H to request the tenant to not deduct TDS.

Things to keep in mind

  • An individual can only submit Form 15G/15H to a bank with a valid PAN, failing which, tax will be deducted @ 20%. It is advisable to submit a copy of the PAN card with the cover letter.
  • The individual should make sure he/she receives an acknowledgment while submitting Form 15G/15H. Acknowledgment of submission of PAN details are useful if a dispute with the bank arises.
  • As per the revised form, the individual will need to submit the details of the Form 15G/15H submitted by him/her to other banks as well as the interest income amount mentioned in these forms.
  • As the individual has submitted his/her PAN, the respective assessing officer will have access to all the information submitted by the individual to other banks and will be able to detect any incorrect information submitted by the individual.
  • Indian law has a provision for imprisonment for a minimum of three months if an individual is found to have provided incorrect information in these declaration forms.

Forms 15G and 15H FAQs

  1. What is the difference between Form 15G and Form 15H?
  2. Both are self-declaration forms that you have to submit to the bank once you open a fixed deposit. While Form 15G is for those who are below 60 years and come under Hindu Undivided Families (HUF), Form 15H is for everyone who is 60 years and above.

  3. If I am an NRI, should I submit a Form 15G and Form 15H?
  4. No, NRIs cannot submit these two forms. You have to be a resident of India to be able to submit Form 15G and Form 15H.

  5. Will the filing of Form 15G/Form15H mean that interest income is not taxable?
  6. These two forms are declarations that no TDS has to be deducted on the interest income because the tax on total income is NIL. The interest income from your recurring deposits, fixed deposits, and also, corporate bonds will be taxable.

  7. Should I submit Form 15G/ Form15H to all branches of my bank?
  8. Yes, you have to submit one copy at every branch of your bank from which you have received interest income. TDS is deducted only when your interest earned from the branches exceeds Rs.10,000.

  9. What happens if I have submitted Form 15G/Form 15H but I also have taxable income?
  10. You will have to notify your bank regarding the tax on your total income and that it is not NIL. The bank will then make the required changes and also deduct TDS.

News About Form 15G and 15H to save TDS

  • Deadline extended for claiming of TDS relief

    On 4 April 2020, the Income Tax Department pushed the deadline for individuals who are claiming TDS exemption by submitting Form 15G and 15H. The move will come as a relief for small taxpayers.

    According to a statement from the tax department, the move will benefit small taxpayers against TDS in case there is no tax liability. In order to help citizens during the coronavirus outbreak, the deadline for various tax and regulatory compliance was extended by the finance ministry to 30 June 2020. In case taxpayers have filed an application for nil or lower tax deduction of TDS and TCS for the financial year 2020-2021 and the applications are still pending, the certificates that they have been given will be applicable until 20 June 2020. In case taxpayers have the certificate for the financial year 2019-2020, and could not apply for nil deduction, the certificates are valid until 20 June 2020. In the case of non-residents who have a permanent establishment in India, tax payments will be charged at a lower rate of 10% until 30 June 2020 or until the applications are disposed of, whichever is lower.

    09 April, 2020

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