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Form 15G & Form 15H
Solution to Save Tax Deduction (TDS) on Interest Income
I am sure most of you will agree with me, when I say tax deduction on Interest credits by banks/financial institutes could be avoided!
Yes, this is possible!
Just fill Form 15G/Form 15H (depending on the applicability) and submit to your bank in the first quarter of the beginning of the financial year to avoid TDS i.e. tax deduction
Let us discuss in detail what is Form 15G and Form 15H? Who can submit these forms? How to submit them and the precautions to be taken while filing these forms.
What is Form 15G and Form 15H?
Form 15G and 15H are self-declaration forms filed with the banks or financial institutions who deduct TDS on the interest income earned/accrued to not deduct TDS on the interest income.
Normally, people have a myth that interest on fixed deposits is calculated at the time of maturity. Instead, it is calculated and TDS on interest on the same is deducted periodically which reflects in your Form 26AS.
Who can file Form 15G and Form 15H & When?
These forms need to be filed every year by the assessee. Forms can be submitted by -
Form 15G
- Any Resident Individual(below 60 years of age) or any person(other than company or firm)
- Having interest income from FD below the basic exemption limits of Rs 2.5 lakhs and
- No final tax liability
- Having a valid PAN can submit the Form 15G.
Form 15H
- Any resident Individual aged 60 years or above namely, Resident Senior Citizens
- Having any Interest Income. I.e. whether the interest earned is below basic exemption limit of 3 lakhs or not, you can still file Form 15H.
- But, The final tax liability should be NIL
- And Must have a valid PAN
What is the need for Form 15G and Form 15H?
Banks or public financial institutions while crediting in your account periodic interest deduct TDS on term deposits. In case of interest earned on saving bank accounts, it shall be offered for taxation as income from other sources. But, there is no deduction of tax for the same. Tax Benefits on interest income are as below:
- If, you are below the age of 60, i.e. not senior citizen Any interest earned by you on savings account for the financial year can be claimed deduction of upto Rs 10,000 under section 80TTA
- But, if you are aged 60 or above The income tax department provides you deduction for Rs 50,000 u/s 80TTB to be availed both on saving bank account interest and FD interests. (As per Finance Act 2018)
So for non senior citizen cases if you have any interest income from term or recurring deposits below basic exemption limit of 2.5 lakhs, you can opt Form 15G to avoid deduction of Tax.
Note: No TDS on saving bank account is deducted by banks and financial institutions.
What are the differences between Form 15G and Form 15H?
You might be tangled among the applicability and effectiveness of both these forms. Both the forms are similar yet distinguished in following ways
| Form 15G | Form 15H | |
|---|---|---|
| Applicable on | Form 15G can be submitted by any person (other than company or firm) | Form 15H can be submitted only by resident Individuals |
| Age Limit | Applies to residents below 60 years of age | Applies to resident senior citizen ( aged 60 years and above ) |
| Interest Income shall fall below basic exemption limit | Interest income shall be below basic exemption limit not chargeable to tax | Interest income may or may not be below basic exemption limit not chargeable to tax |
| Provision under Income Tax Act | As per Section 197A (1) and (1A) | As per Section 197A (1C) |
Examples relating to Form 15G and Form 15H
Lets understand the insights about Form 15G and Form 15H, more transparently with the help of examples below
Example to understand Form 15G
| Mr Aditya | Mr Shekhar | Mrs Bhalla | |
|---|---|---|---|
| Aged | 45 | 55 | 65 |
| Salary Income | 2,00,000 | 1,00,000 | 1,00,000 |
| Income from Interest on various Fixed deposits | 60,000 | 2,80,000 | 2,70,000 |
| Gross Total Income | 2,60,000 | 3,80,000 | 3,70,000 |
| Deductions under chapter-VI-A like u/s 80C etc | 1,20,000 | 1,50,000 | 2,00,000 |
| Taxable income after Chapter VI -A deductions | 1,40,000 | 2,30,000 | 1,70,000 |
| Basic exemption Limit | 2,50,000 | 2,50,000 | 3,00,000 |
| Net taxable income i.e Taxable Income | NIL | NIL | NIL |
| Applicability of Form 15G | YES | NO | NO |
| Reasons | Form 15G is applicable because a. Mr Aditya is not a senior citizen b. Has interest income below taxable limit c. Final Tax Liability is NIL | Form 15G is NOT applicable because Although the tax liability is NIL, interest income exceeds the basic exemption limit. | Form 15G is NOT applicable because Mrs Bhalla is a senior citizen and in this case form 15H shall apply |
Example to understand Form 15H
| Mr Sharma | Mr Verma | Mrs Chopra | |
|---|---|---|---|
| Aged | 65 | 75 | 55 |
| Salary/ Pension Income | 1,50,000 | 1,00,000 | 2,00,000 |
| Income from Interest on various Fixed deposits | 2,80,000 | 3,20,000 | 1,20,000 |
| Gross Total Income | 4,30,000 | 4,20,000 | 3,20,000 |
| Deductions under chapter-VI-A like u/s 80C etc | 1,50,000 | 1,50,000 | 1,50,000 |
| Taxable income after Chapter VI -A deductions | 2,80,000 | 2,70,000 | 1,70,000 |
| Basic exemption Limit | 3,00,000 | 3,00,000 | 2,50,000 |
| Net taxable income i.e Taxable Income - Basic Exemption Limit | NIL | NIL | NIL |
| Applicability of Form 15H | YES | YES | NO |
| Reasons | Form 15H is applicable because
a. Mr Verma is a senior citizen b. Final tax liability is NIL |
Form 15H is applicable because
a. Mr Sharma is a senior citizen b. Final tax liability is NIL |
Form 15H is NOT applicable because
Mrs Chopra is NOT a senior citizen and in this case Form 15G shall apply |
Note : For Form 15H we need not check whether the interest income falls below the threshold limit ( maximum amount not chargeable to tax) or not.
Form 15G or Form 15H can be submitted for which transactions?
Forms 15G / H can be submitted for these transactions namely
- Interest Income - To banks and financial institutions deducting TDS on interest income.
- Premature EPF Withdrawals - Any amount withdrawn Rs 50,000 or more before 5 years from date of opening the account is liable for TDS. But the compliances can be avoided on furnishing Form 15G/H subject to fulfilment of conditions.
- On Rental income - If rental income is Rs 2,40,000/- or more during the year and resultantly tax is deductible, you may file Form 15G or Form 15H as per the applicability.
- Insurance Commission - Any insurance agent earning commision exceeding Rs 15,000 is liable to TDS and can validly file these forms
- Income from corporate bonds - TDS is deducted on income from corporate bonds exceeding Rs 5,000. Form 15G or Form 15H can be submitted to the issuer requesting for non-deduction of such TDS amount.
- Post office deposits – Digitalised post offices also deduct TDS on the basis of specified conditions. Form 15G or Form 15H can be submitted requesting for non deduction of any TDS amount applicable.
- Dividends - If the dividend income exceeds Rs.2,500 then TDS is required to be deducted.Form-15G/Form-15H can be submitted for non/lower deduction of TDS.
- Proceeds of life insurance policy - If such proceeds other than those u/s 10(10D) exceeds Rs.1,00,000 in a FY then the payer is required to deduct TDS @ 5%. The taxpayer can file Form-15G/Form 15H, as applicable to avoid or for lower deduction of TDS.
What are the Precautions which needs to be taken care of while filing Form 15G/H?
Some precautions if taken care of during the complete process will ease out the things. An illustrative list of such precautions could be drawn as under
- These forms are needed to be filed in the beginning of the every year
- Make sure you obtain a copy of acknowledgement to work as a proof in case of dispute with bank in future
- PAN shall be quoted so as to avoid TDS deduction at higher rate of 20%
- If your bank/ PFI do not provide for online facility to submit the Form yet. Do not wait, go and submit it physically as soon as possible.
Can Form 15G /15H be submitted even if your total income exceeds tax-exemption level?
Form 15G/15H can be submitted even if your total income exceeds the basic exemption level.Form-15G cannot be submitted if total interest income for the year exceeds the basic exemption limit. The Income Tax Act states that Form 15G/15H can be issued to those who provides an estimate of their total income on which tax is zero and total income comes after considering deductions and allowances.
How to File Form 15G and 15H online?
The process for online submission of Form 15G and 15H has been much simplified since its introduction in year 2015. Now users have the option to opt for physical submission of form or just login with internet banking credentials and submit these Forms. In addition to this some banks like HDFC do not even lay requirement to opt for internet banking to file form 15G / 15H. Learn how
ICICI Bank ICICI prescribes following steps for online furnishing of Form 15G/ 15H
- Log in to ICICI Bank Internet Banking
- From column on top > Payments and Transfer > Select Tax Centre
- Select Form 15G/H > update
- Fill up necessary details
- Click Submit
- On Request Confirmation page , recheck details and > click submit
- You can view the list of deposit accounts for which the form is generated and > click on ‘Submit Form’ to finish the process
- Don't forget to download the Acknowledgment
- Save Service Request number for your future reference.
Or
The other option to file Form 15G / H to ICICI bank is through Insta Banking Kiosk:
- At the venue access using debit card or Internet Banking details
- Select Form 15G/ 15H
- Choose your account number
- Fill the required details
- Submit request
SBI Bank
- Login using internet banking credentials
- Select E-Service tab
- A link can be traced on the left to submit Form 15G/H
- On the right 15G / H forms will show up
- Fill up necessary details and click on submit
HDFC Bank
- Go to 'Accounts' tab > select 'Request' Section > Choose 'Form 15G/H'
- View FD Details
- Click Confirm
- View and save the e acknowledgement for future reference
OR Click on the links below for Submitting Form 15G and 15H respectively, fill the details and submit to HDFC bank online.
What are the informations required to be furnished in Form 15G and Form 15H?
Some basic informations like Name of taxpayer / individual , address, communication details and estimated income etc together with verification and declaration shall be signed and submitted. The forms are divided into two parts as shown below. The first part needs to be filled by you and the second one by the authority you are submitting respective form to. Both these forms seem to be identical but there is an important difference among two. Form 15H has an additional column for Date of Birth to keep a track apparently that, you can furnish this form only if you are aged 60 years or above. For more details find the specimen copies of both the forms attached hereto below.
Frequently Asked Questions
Q- Can NRI submit Form 15G/H?
No NRI cannot submit these forms.
Q- What is the Penalty for wrong Declaration?
Any wrong declarations made shall attract prosecution and fine under section 277 of the Income Tax Act 1961. In case tax sought to be evaded
- Exceeds Rs 25 lakhs imprisonment term shall not be less than six months but which may extend to 7 years years and fine.
- In other cases imprisonment ranging from 3 months to 2 years with fine.
Q- If I wish to avoid TDS then can I file Form 15G/H?
You can file these forms only if your total tax liability is NIL and all other eligibility conditions as specified above are successfully met.
Q- Are Forms 15G or Form 15H an alternate to ITR?
No, the forms are no alternate to filing your Income Tax Return. Even if you have made disclosure about your income in these forms you need to comply with filing requirements of IT return separately.
Q- What if i have tax payable after filing form 15G/H?
In case after filing form 15G/H, your tax liability does not comes to zero then you have to pay the taxes. Moreover, this may amount to wrong or false declaration and can attract you repercussions as mentioned above u/s 277. So be very vigilant before filing these forms.
Q- Do I need to submit these forms to Income Tax Department?
Not Really, actually they are submitted to the authority from which you will receive income and on such income the respective authority is liable to deduct the TDS. No separate compliances are required to be undertaken at your part.
Q- Does declaration needs to be submitted to every branch of bank separately?
Yes, it will be better if any income accrues to you which can be tax deductible, then you need to submit the forms to every branch of the organisation from where such income is due. Also, you can ask this from the respective bank / branch.
Q- What if I do not furnish PAN details with Form 15G/H?
Anyone not submitting PAN shall attract TDS @20%.
Q- If bank has deducted tax in-spite of duly filing Form 15G/H, can I demand for refund?
No, even in case where bank has deducted your tax after duly filing Form 15G/H you cannot demand for refund from bank. The only route open is to file your Income Tax Return and claim refunds in it.
Q- What is the perfect time for submission of the Form?
It is suggested to file your form at the beginning of the year so as to avoid a situation where bank has already deducted your taxes.
Q- Shall I obtain acknowledgement for Form 15G/H filed?
It is suggestive to obtain the same. It help to lesser the cases of wrong declaration claims made by banks Also, you get a valid proof in hand in case TDS is deducted or wrong deducted.
Q- What if i miss filing Form 15G/H?
There are no harsh consequences to it. It is just that you will now be required to file income tax return to validly claim TDS refund.
Q- Can HUF submit Form 15G/Form 15H?
Form 15G can be submitted by both. But form 15H can only be submitted by Resident Individual.
Q- What happens if 15g not submitted?
If Form 15G is not submitted then deductor will deduct TDS even if the Income of the deductee is not taxable.
Q- What is the limit for Form 15g?
There is no provision for any limit. It is submitted when total interest Income of the assessee is below basic exemption limit.There is zero tax liability.
Q- What is total income in Form 15g?
Total income as per Form 15G is income estimation on which no tax is required to be paid.
Q- Will my interest income become tax free if I submit Form 15G/Form 15H?
No, interest income on FD/RD are taxable. However if tax on total income is nil then assessee can submit form 15G/Form 15H
Q- I submitted Form 15G and Form 15H but I have taxable income?
No, Only an assessee whose tax liability is nil and subject to other conditions are eligible to submit form 15G / Form 15H
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