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

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The interest you receive from bank accounts and deposits is fully taxable. Thus, the bank is supposed to deduct TDS from it every year if your interest exceeds Rs 40,000. The limit is Rs 50,000 for senior citizens. But what if your total taxable income in a financial year is less than the maximum tax-exempt limit; i.e. Rs 2.5 lakhs? You can submit Forms 15G and 15H to avoid TDS deduction on your interest income in such a case.

What is Form 15H?

Form 15H is a declaration under sub-section (1C) of section 197A of the Income Tax Act to be made by an individual of the age of 60 years or more to claim certain receipts without deduction of tax.

Important features of Form 15G:

  • You can submit Form 15G as an individual taxpayer whose age is below 60 years, an HUF and a Trust.
  • You should submit Form 15G before the payment of any interest by the bank.
  • You will need to submit the form to all the branches and banks where you have an interest-bearing deposit.
  • The eligibility for the Form comes into picture when your taxable income does not lead to a tax liability for the financial year.
  • The facility is only available to resident Indians.
  • The total interest income you will receive in the financial year should be less than the minimum taxable income of Rs 2.5 lakhs.
  • 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.
  • Need to be submitted to the banks if the interest from one branch exceeds Rs.10,000 a year.
  • It 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.

Eligibility Criteria to Submit this Form has been Listed Below

  • Form 15G can be submitted by individuals below the age of 60 years or by a Hindu Undivided Family (HUF).
  • It 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 total interest income is less than the minimum exemption amount for that year. The minimum exemption amount for the financial year 2022-23 (AY 2023-24) is Rs.2,50,000.

The validity of Form 15H and 15G are one year. The forms must be submitted at the start of every financial year.

In case the forms are not submitted, the TDS may have been deducted by the bank. In such cases, you can file the forms immediately or file the ITR to get the TDS refunded.

Places where Form 15H and 15G can be Submitted – Apart from Banks

Apart from banks, some of the places where Form 15H and 15G can be submitted are mentioned below:

  • LIC Premium Receipts
  • Income from Corporate Bonds
  • EPF Withdrawal

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