The Indian Income Tax Act mandates banks to deduct Tax Deducted at Source (TDS) when an individual's interest income exceeds a certain threshold. For individuals other than senior citizens, this threshold is Rs. 40,000 per year, while for senior citizens, it is Rs. 50,000 per year, as per section 194A of the Income Tax Act. However, if your total income falls below the taxable limit, you can submit Form 15G or Form 15H to the bank and request them not to deduct any TDS on your interest income.
Form 15G and Form 15H are self-declaration forms that individuals can submit to the bank to request the non-deduction of TDS on their interest income. These forms are applicable when an individual's income falls below the basic exemption limit, which is Rs. 2.5 lakh for the financial year 2020-21 (AY 2021-22). It is important to note that only residents can avail the benefits of Form 15G and Form 15H, and these forms cannot be used by non-residents.
Form 15G and Form 15H are valid for one financial year. It is advisable to submit these forms at the beginning of each financial year to ensure that the bank does not deduct any TDS on your interest income. Some banks even provide the option of submitting these forms online through their website.
For the financial year 2020-21, the due date for filing Form 15G/Form 15H has been extended to 30th June 2021 from the original deadline of 31st March 2021 due to the impact of the second wave of COVID-19.
In case you forget to submit Form 15G or Form 15H on time, the bank may have already deducted the TDS. However, depending on your situation, you can take the following steps:
While banks are the primary entities where you can submit Form 15G and Form 15H to prevent TDS deduction on your interest income, there are a few other scenarios where you can also submit these forms:
It is important to note that as a TDS deductor, the Income-tax Act requires you to allot a Unique Identification Number (UIN) to everyone who submits Form 15G or Form 15H. You must file a statement of Form 15G/Form 15H on a quarterly basis and retain these forms for seven years.
Form 15G must be filled accurately to ensure that your request for non-deduction of TDS is processed correctly. Here's a step-by-step guide on how to fill Form 15G:
It is crucial to note that if your income has to be clubbed with the income of another person, Form 15G is not valid. For example, if the interest income from an FD is for a non-earning spouse or child, it has to be clubbed with the income of the depositor, and Form 15G cannot be used in this case. The PAN of the depositor is mandatory, and TDS should be deducted in the name of the depositor.
You can download Form 15G and Form 15H from the official income tax department website.
Form 15G is a self-declaration form submitted by individuals who are below the age of 60 to their financial institutions to prevent the deduction of TDS on interest income.
Individuals below the age of 60 years whose total income is below the taxable limit can submit Form 15G.
Form 15H serves the same purpose as Form 15G but is specifically for senior citizens aged 60 years or above.
By submitting these forms, individuals declare that their total income is below the taxable limit, and hence, no TDS should be deducted on the interest earned on their investments.
Incorrect submission of these forms or providing false information can lead to penalties and legal consequences.
Yes, individuals must meet specific eligibility criteria, such as having income below the taxable limit, to submit these forms.
These forms need to be submitted annually or whenever there is a new deposit made in the financial institution if the individual wants to continue availing the benefits.
No, these forms are applicable only for certain types of interest income, such as interest earned on fixed deposits, recurring deposits, or savings accounts.
These forms should be submitted before the beginning of the financial year in which the income is earned.
If the income exceeds the threshold during the financial year, individuals should inform the financial institution immediately to avoid any discrepancies or penalties.