Form 15G and 15H : Details, Process, Benefits & More
What can you do to make sure bank does not deduct TDS on interest, if your total income is not taxable? Banks have to deduct TDS when your interest income is more than Rs.40,000 in a year (prior to FY 2019-20, the limit was Rs 10,000). The bank adds deposits held in all its branches to calculate this limit. But if your total income is below the taxable limit, you can submit Form 15G and 15H to the bank requesting them not to deduct any TDS.
Form 15G and 15H submitted for FY 2019-20 will be valid up to 30 June 2020.
1. What is Form 15G and Form 15H?
Form 15G and Form 15H are forms you can submit to prevent TDS deduction on your income, if you meet the conditions mentioned below. For this, PAN is compulsory. Some banks allow you to submit these forms online through the bank’s website. Form 15H is for senior citizens, those who are 60 years or older; while Form 15G is for everybody else.
Form 15G and Form 15H are valid for one financial year. So, please submit these forms every year at the beginning of the financial year. This will ensure the bank does not deduct any TDS on your interest income.
For FY 2020-21, in view of the spread of the disease COVID-19, taxpayers may not be able to submit the forms in the first week of April 2020. Hence, the government has extended the validity of the Form 15G and Form 15H expiring on 31 March 2020 up to 30 June 2020. Taxpayers can submit the Form 15G and Form 15H in the first week of July 2020. For the period beginning 1 April 2020 and up to 30 June 2020, the Form 15G and 15H submitted for FY 2019-20 will be valid proof for non-deduction of TDS.
2. Conditions you must fulfil to submit Form 15G
- You are an individual or HUF or trust or any other assessee but not a company or a firm
- Only Resident Indians can apply
- You should be less than 60 years old
- Tax calculated on your Total Income is nil
- The total interest income for the year is less than the basic exemption limit of that year, which is Rs.2.5 lakh for financial year 2019-20 (AY 2020-21)
3. Conditions you must fulfil to submit Form 15H
- You are an individual and resident Indian
- You’re a senior citizen or will be 60 during the year for which you are submitting the form
- Tax calculated on your Total Income is nil
4. Examples to understand who can submit Form 15G and Form 15H
|Person / Category||Neha||Deepak||Swathi||Rahul|
|Age||50 years||21 years||65 years||68 years|
|Fixed Deposit interest income||Rs. 85,000||Rs. 2,60,000||Rs. 1,80,000||Rs. 3,30,000|
|Total Income before allowing section 80 Deductions||2,65,000||2,60,000||2,80,000||3,30,000|
|Deductions under section 80||Rs. 45,000||Rs. 30,000||Rs. 10,000||Rs. 55,000|
|Taxable income||Rs. 2,20,000||Rs. 2,30,000||Rs. 2,70,000||Rs. 2,75,000|
|Minimum exempt income||Rs. 2,50,000||Rs. 2,50,000||Rs. 3,00,000||Rs. 3,00,000|
|Eligible to submit Form 15G||Yes||No||No||No|
|Eligible to submit Form 15H||No||No||Yes||Yes|
|Explanation||Form 15G can be submitted as age is less than 60 years. Total tax is nil and interest income is less than minimum exempt income.||Form 15G cannot be submitted since interest income is more than the basic exemption limit||Form 15H can be submitted if age is more than 60 years and tax calculated on total income is nil.||Form 15H can be submitted as age is more than 60 years and tax calculated on total income is nil. Form 15H can be submitted although interest income exceeds basic exemption limit.|
5. Forgot to submit Form 15G or Form 15H?
A lot of taxpayers forget to submit Form 15G and Form 15H on time. In such a situation, the bank might have already deducted the TDS. Based on your situation, you can do any of the following.
1. File your income tax return to claim refund of TDS
The only way to seek a refund of excess TDS deducted is by filing your income tax return. Banks or other deductors cannot refund TDS to you, since they have already deposited it to the income tax department. Income tax department will refund excess TDS, after you file an income tax return. Banks or other deductors cannot refund TDS to you, since they have already deposited it to the income tax department. Income tax department will refund excess TDS, after you file an income tax return
2. Submit Form 15G and Form 15H immediately
Most banks deduct TDS every quarter. If you forgot to submit Form 15G or Form 15H, don’t worry. Submit it at the earliest so that no TDS is deducted for the remaining financial year.
To claim refund of excess TDS deducted, start filing your return on TAXAJ
6. Purposes for which Form 15G or Form 15H can be submitted
While these forms can be submitted to banks to make sure TDS is not deducted on interest, there are a few other places too where you can submit them.
- TDS on EPF withdrawal –TDS is deducted on EPF balance if withdrawn before 5 years of continuous service. If you have had less than 5 years of service and plan to withdraw your EPF balance of more than Rs.50,000 (Rs 50,000 effective 1 June 2016, Rs.30,000 prior to that), you can submit Form 15G or Form15H. However, you must fulfil conditions (listed above) to apply for these forms. It means the tax on your total income including EPF balance withdrawn should be nil.
- TDS on income from corporate bonds –If you hold corporate bonds, TDS is deducted on them if your income from them exceeds Rs 5,000. You can submit Form 15G or Form 15H to the issuer requesting non-deduction of TDS.
- TDS on post office deposits –Post offices that are digitised also deduct TDS and accept Form 15G or Form 15H, if you meet the conditions applicable for submitting them.
- TDS on rent – TDS is deducted on rent exceeding Rs 2.4 lakh annually. If tax on your total income is nil, you can submit Form 15G or Form 15H to request the tenant to not deduct TDS (applicable from 1 April 2019).
- TDS on Insurance Commission – TDS is deducted on insurance commission, if it exceeds Rs 15000 per financial year. However, insurance agents can submit Form 15G/Form 15H for non deduction of TDS if tax on their total income is nil (with effect from 1 June 2017).
HUF can submit Form 15G if it meets the conditions but Form 15H is only for individuals. To find more about taxes for HUF read our guide on HUF taxation here.
NRIs cannot submit Form 15G or Form 15H. These can only be submitted by resident Indians.
Yes, you must submit one at each branch of the bank from which you receive interest income though TDS is deducted only when total interest earned from all branches exceeds Rs 10,000.
Form 15G/Form 15H is only a declaration that no TDS should be deducted on your interest income since tax on your total income is nil. Interest income from fixed deposits, recurring deposits, and corporate bonds is always taxable.
Interest income from fixed deposits and recurring deposits is taxable. For senior citizens deduction of Rs.50,000 is available under section 80TTB for the interest income from fixed deposits/post office deposits/deposits held in co-operative society. You should submit this form only if tax on your total income is zero along with other conditions.
6. I submitted Form 15G and Form 15H but I have taxable income?
You must intimate to your bank that tax on your total income is not zero. The bank will make changes and deduct TDS accordingly. Do report the entire interest income in your tax return and pay tax on it as applicable.
7. Do I have to submit this form to the income tax department?
You don’t need to submit these forms directly to the income tax department. Just submit them to the deductor, and they will prepare and submit these forms to the income tax department.
8. Important Information for Deductors
If you are a TDS deductor, the Income-tax Act requires you to allot a Unique Identification Number or UIN to everyone who submits a Form 15G/Form15H. You must file a statement of Form 15G/Form15H on a quarterly basis and must retain these forms for 7 years.
- TDS on EPF withdrawal – TDS is deducted on EPF balances if withdrawn before 5 years of continuous service. If you have had less than 5 years of service and plan to withdraw your EPF balance of more than Rs 50,000 (Rs 50,000 effective 1 June 2016, Rs 30,000 prior to that), you can submit Form 15G/Form15H. However, you must fulfil conditions (listed above) to apply for these forms, i.e. tax on your total income including EPF balance withdrawn should be nil.
- TDS on income from corporate bonds –If you hold corporate bonds, TDS is deducted on income from them exceeding Rs 5000. You can submit Form 15G/Form15H to the issuer requesting to not deduct any TDS.
- TDS on post office deposits – Digitized post offices can also deduct TDS and accept Form 15G/Form15H, if you meet the conditions applicable for submitting them.
- LIC premium receipts – Effective from October 2014, if the amount received from a policy exceeds Rs 1 lakh and it is taxable, 2% TDS shall be deducted by the insurer before paying. You can submit Form 15G/Form 15H to request that no TDS be deducted since tax on your total income is nil.
- TDS on rent – TDS is deducted on rent, if total rental payment in a year exceeds Rs 2.4 lakh. If tax on your total income is nil, you can submit Form 15G/Form15H to request the tenant to not deduct TDS (applicable from 1 April 2019).
- TDS on Insurance Commission – TDS is deducted on insurance commission, if it exceeds Rs 15,000 per financial year. However, insurance agents can submit Form 15G/Form 15H for non deduction of TDS if tax on their total income is nil, with effect from 1 June 2017.
9. How to fill Form 15G?
- Name of Assessee (Declarant) – Enter your name as per income tax records
- PAN of the assessee – PAN number as per your PAN card
- Status – Whether you are an individual or HUF
- Previous Year – current financial year for which you are filing up the form
- Residential Status – this form can only be filled by Residents.
- Flat/Door/Block No – details of your address
- Name of Premises – details of your address
- Road/Street/Lane – details of your address
- Area/Locality – details of your address
- Town/City/District – details of your address
- State – details of your address
- PIN – details of your address
- Telephone no
- (a) whether assessed to tax under the income tax act, 1961? – If your income was above taxable limit in any of the past 6 years, answer this question with ‘yes’
(b) If yes, latest assessment year for which assessed – mention the latest year in which your income was above taxable limit
- Estimated income for which declaration is made – sum of income on which TDS should not be deducted
- Estimated total income of the previous year in which income mentioned in column 16 to be included – Calculate your total income from all sources, salary, stipend, interest income, any other income that you have earned during the year. Include the income mentioned in 16, above
- Details of Form 15G other than this form filed during the previous year, if any; total number of form no 15G filed and aggregate amount of income for which form 15G filed – If you have filled Form 15G in the past, mention the total number of Form 15G filed. Also provide the total income for which Form 15G was filed
- Details of income for which declaration is filed; Identification number of relevant investment/account etc, Nature of Income, Section under which tax is deductible, Amount of income – Provide fixed deposit account number, recurring deposit details, details of NSCs, life insurance policy number etc. (many of these are chargeable to tax under section 56 of the income tax act)
- Signatures – mention your capacity when signing on behalf of an HUF or AOP
Do not submit the form if such income has to be Clubbed with the income of another person
Do not submit Form 15G, if your income has to clubbed with someone else. Interest income from an FD for a non-earning spouse or a child has to be clubbed with the income of the depositor. In such a case Form 15G is not valid. PAN of the depositor is mandatory and TDS should be deducted in the name of the depositor.
10. Difference between form 15G and Form No 15H
1. Form 15G can be submitted by individual below the Age of 60 Years while form 15H can be submitted by senior citizens (60 years & above).
2. Form 15G can be submitted by Hindu undivided families also but form 15H can be submitted only by Individual above the age of 60 years.
3. 15G cannot be filed by any person whose income from interest on securities/interest other than “interest on securities” exceeds the applicable basic exemption limit.
Certain points to remember while submitting Form 15G & 15H
1. Please ensure to mention Permanent Account Number (PAN) on the forms while submitting form No. 15G or Form No. 15H. In case, taxpayer fails to provide PAN to the deductor, the tax would be deductible @ 20%. As a precautionary measure, taxpayer should keep hard copy of an acknowledgement of Form No. 15G/Form No. 15H filed with the deductor (with PAN mentioned over it) to ensure that tax is not deducted at all.
2. These Forms are to be submitted in duplicate, one of which is forwarded to the IT department. Income Tax Authorities can make further inquiries regarding the declaration filed by the depositor.
3. The form should be submitted at the beginning of each financial year or at the time of deposit itself so as to avoid a situation where payer has already deducted the tax before its receipt.
4. If a person is making FD in different branches of same bank then these forms should be deposited at each and every branch where the deposit has been made. For example, if Mr. Ashish has made deposits at three different branches of SBI, then he has to submit the Forms at each branch separately.
6. No TDS is deductible by banks on interest payable in saving bank accounts.
7. In case of bank FDR made for longer duration, even if interest will be paid on maturity only, the bank is required to deduct tax at source on the interest accrued for that year even though no interest in fact has been paid. So, ensure to submit form No. 15G/H on yearly basis even if FD doesn’t mature in that year.
8. Any false or wrong declaration attracts penalty under section 277 & so it should not be signed blindly. Such false declaration is liable for prosecution which may range from 3 months to 7 years depending upon the quantum of default. Taxpayer can be penalized with rigorous imprisonment irrespective of fact that such wrong details were furnished intentionally or unintentionally as “Ignorance of Law is no excuse.”
9. Further, the taxpayer may please note that Part A1 in form 26AS shows the interest on FD’s against which tax is not deducted due to submission of Form No. 15G/ Form No. 15H. The information is readily with the IT department.
10. Irrespective of the fact that Form 15G & Form No. 15H has been filed or not, such income has to be mentioned under proper head while filing the return.
I hope that from the above discussion, it may be clear that you need to comply with certain conditions to be eligible to file form No. 15G or Form No. 15H. Moreover, you need to take certain precautions while filing these forms with the payer. Download Form 15G & 15H in Word format