Home>Fixed Deposit>Form 15G, Form 15H: Tax Saving on FD Interest Income

Form 15G, Form 15H: Tax Saving on FD Interest Income

Updated on: 16 Nov 2023 | 10 min read

Under section 194A of the Income Tax Act of 1961, if your interest income exceeds ₹40,000 from FDs in a given financial year (₹50,000 for senior citizens), banks deduct TDS of 10%.

However, if your income is below the taxable limit, you can submit Form 15G for non-senior citizens and Form 15H for senior citizens. Banks will not deduct TDS if you submit Form 15G or 15H.

What is Form 15G and 15H?

Form 15G and Form 15H are self-declaration forms wherein you submit the application form to the bank requesting not to deduct TDS on interest income. Various banks allow submitting these forms online from their official portal or mobile app. However, furnishing PAN is mandatory. Moreover, these forms are only for resident Indians. Non-resident Indians (NRIs) cannot use these forms to avoid TDS deduction.

Where Form 15G and Form 15H are Required to be Submitted?

  • EPF Withdrawal: TDS is deducted on EPF withdrawal if the balance is over ₹50,000 and is withdrawn before 5 years of continuous service. In this case, you can submit Form 15G.  
  • Income from Corporate Bonds: If the income from corporate bonds surpasses ₹5,000, then it is subject to TDS. However, you can submit Form 15G or 15H requesting the issuer not to deduct TDS.
  • Income from LIC Policies: If the amount received from the LIC policy is over ₹1 lakh and the maturity amount is taxable, then 5% TDS is applicable. However, if your total income tax is zero, you can submit Forms 15G and 15H requesting not to deduct TDS.
  • Income from Post Office Deposits: Income from post office deposits is also subject to TDS; hence, you can submit Form 15G and 15H. 
  • Income from Rent: With effect from April 1, 2019, the tenant needs to deduct the TDS on rent exceeding ₹2.4 lakhs annually. However, if the tax on your total income is nil, you can submit Form 15G or Form 15H requesting the tenant not to deduct TDS.

How to Fill Form 15G?

  • Name of Assessee (Declarant): Fill in your name and PAN number as per your PAN card.
  • Status: Fill in whether you are an individual or a HUF.
  • Previous Year: Fill in the current financial year you are filling out the form.
  • Residential Status: You can only fill out this form if you are an Indian resident.
  • Contact Details: Fill in your current address, email, telephone, and mobile number.
  • Whether assessed to tax under the Income Tax Act, 1961?: If in any of the past 6 years your income has been above the taxable limit, then fill in “yes.”
  • If yes, the latest assessment year you assessed: Fill in the latest year in which your income was above the taxable limit.
  • Estimated income for which declaration is made: Fill in the total income (including interest income) on which TDS is not to be deducted.
  • Estimated total income of the previous year (PY) in which income is mentioned in row 16 to be included: Calculate your total income from all sources, salary, stipend, interest income, or any other income you earned during the year.
    Note: Include the income mentioned in row 16 below.
  • Details of forms filed other than Form 15G during the previous year, if any: Please provide the exact number of Forms you have filled and the total income pertaining to which the declaration is being filed.
  • The aggregate amount of income for which Form 15G was filed: Fill in the total income for which you filed Form 15G during the previous year.
  • Details of income for which declaration is filed: Fill in the identification number of relevant investment/account etc., nature of income, and Section under which tax is deductible, also fill in the fixed deposit account number, recurring deposit details, details of NSCs, life insurance policy number, etc.
  • Signature of the Declarant: Sign the form, and if you are signing on behalf of HUF or the Association of Persons (AOP), fill in your capacity.
    Note: Do not submit Form 15G if income has to be clubbed with another person's income.

Form 15G sample

Screenshot 2023-09-08 at 11.57.42 AM.png

Key Features of Form 15G

  • Form 15G is a self-declaration form that individuals under 60 can submit to banks and other financial institutions. The rules for Form 15G are mentioned in Section 197A of the Income Tax Act, 1961. 
  • The form requests that tax deducted at source (TDS) not be deducted on their interest income, provided their annual income is below the basic exemption limit.
  • The Central Board of Direct Taxes (CBDT) introduced the current format of Form 15G in 2015 to make it easier for tax deductors and tax deductees to comply with the law.
  • To avail of the benefit of Form 15G, individuals must submit the form for existing investments in the first quarter of the financial year. 
  • Form 15G must be submitted before the first interest credit for new investments.

Eligibility Criteria to Fill Form 15G

To be eligible to submit Form 15G, you must:

  • Be an individual or a person other than a company or a firm.
  • Be a resident Indian for the financial year in question.
  • Be under 60 years old.
  • Have a zero tax liability based on your total taxable income for the financial year.
  • Have a total interest income below the basic exemption limit for the financial year.

How to fill form 15H?

  1. Name of Assessee (Declarant): Fill in your name and PAN number as per your PAN card.
  2. Status: Fill in whether you are an individual or a HUF.
  3. Previous Year: Fill in the current financial year you are filling out the form.
  4. Residential Status: You can only fill out this form if you are an Indian resident.
  5. Contact Details: Fill in your current address, email, telephone, and mobile number.
  6. Whether assessed to tax under the Income Tax Act, 1961?: If in any of the past 6 years your income has been above the taxable limit, then fill in “yes.”
  7. If yes, the latest assessment year you assessed: Fill in the latest year in which your income was above the taxable limit.
  8. Estimated income for which declaration is made: Fill in the total income (including interest income) on which TDS is not to be deducted.
  9. Estimated total income of the previous year (PY) in which income is mentioned in row 16 to be included: Calculate your total income from all sources, salary, stipend, interest income, or any other income you earned during the year.
    • Note: Include the income mentioned in row 16 below.
  10. Details of all forms filled other than Form 15H during the previous year: Please provide the exact number of forms you have filled and the total income pertaining to which the declaration is being filed
  11. The aggregate amount of income for which Form 15H was filed: Fill in the total income for which you filed Form 15G during the previous year.
  12. Details of income for which declaration is filed: Fill in the identification number of relevant investment/account etc., nature of income, and Section under which tax is deductible, also fill in the fixed deposit account number, recurring deposit details, details of NSCs, life insurance policy number, etc.
  13. Signature of the Declarant: Sign the form in your individual capacity.
    • Note: Do not submit Form 15H if income has to be clubbed with another person's income

Form 15H sample

Screenshot 2023-09-08 at 12.01.39 PM.pngYou can download Form 15G and Form 15H from the below links:
Download Form 15G
Download Form 15H

Eligibility Criteria to Fill Form 15H

To be eligible to submit Form 15H, you must:

  • An individual taxpayer, not an entity or organisation.
  • Anyone who is at least 60 years old.
  • Anyone who has no tax liability for the applicable financial year.

Key Features of Form 15H

  • Form 15H is a self-declaration form that individuals under 60 can submit to banks and other financial institutions. The rules for Form 15H are mentioned in Section 197A of the Income Tax Act, 1961.
  • The form requests that tax deducted at source (TDS) not be deducted on their interest income, provided their annual income is below the basic exemption limit.
  • The Central Board of Direct Taxes (CBDT) introduced the current format of Form 15H in 2015 to make it easier for tax deductors and tax deductees to comply with the law.
  • To avail of the benefit of Form 15H, individuals must submit the form for existing investments in the first quarter of the financial year.
  • Form 15H must be submitted before the first interest credit for new investments.

What to Do if I Forget to Submit Form 15G and 15H on Time?

Although most people file Form 15G and Form 15H when opening a deposit account. However, some might forget to submit them on time, resulting in a deduction of the TDS. In this case, you can do the following:

  1. File Income Tax Return (ITR) to claim a refund of TDS: You can file ITR to get the refund of excess TDS deducted. Deductors never refund you the TDS, as they deposit the same to the Income Tax Department.
  2. Submit Form 15G and Form 15H immediately: Usually, banks deduct TDS every quarter. Hence, submit Form 15G or Form 15H at the earliest so the bank will not deduct the TDS for the remaining financial year.

Difference between Form 15G and 15H

Parameters

Form 15G

Form 15H

EligibilityIndian residents ( not a compaany or a fir) less than 60 years of age are eligible for 15G.Indian residents of 60 years and above are eligible for this form.
UsesForm 15G can be used for non-deduction of TDS on interest income from bank deposits, interest from post office deposits, interest from rental income, Employers’ Provident Fund Withdrawal, from a life insurance policy, interest from corporate bond and debentures.Form 15H can be usedto avoid TDS on the interest generated from fixed deposits, from corporate bonds, post office, on EPF withdrawal, rent.
BenefitsThis form helps individuals below 60 years to avoid TDS deductions from interest income in a financial year. It cannot be filled by NRIsThis form helps individuals above 60 years to avoid TDS deductions from interest income in a financial year. It cannot be filled by NRIs
Issued AgainstThis form is issued against a Fixed deposit holder having an age of below 60 years.This form is issued against the Fixed deposit holder and Recurring deposit holder aged 60 years or above.
IssuerAll major banks of India and the Income Tax Department issue Form 15G.All major banks of India and the Income Tax Department issue Form 15G.

IT Act Sections and TDS rates

Below mentioned are some common TDS Sections

Investment TypeSections of Income Tax ActThreshold limitTDS (with Valid PAN)TDS without PAN
Interest on Bank Deposits194A10,00010%20%
EPF Proceeds- Premature Withdrawal192A30,00010%30%
Interest on securities19310%20%
Dividend income1942,50010%20%
Interest other than interest on securities194A5,00010%20%

Conclusion

When you invest in FDs, the TDS is deducted from the interest that you earn if it is over ₹40,000 for non-senior citizens (₹50,000 for senior citizens). However, you can avoid it by submitting Form 15G or Form 15H to the bank. However, you need to ensure zero tax on your total income. This article is a detailed guide on Form 15G and 15H, wherein you also understand how to fill Form 15G and Form 15H.

FAQs

Who is eligible for 15G?

Individuals who are below 60 years of age and whose tax liability on total income is zero are eligible to submit Form 15G. Moreover, only resident Indians are eligible. NRIs (Non-Resident Individuals) cannot submit Form 15G.

Who is eligible for 15H?

Individuals whose tax on total income is zero and are adobe 60 years of age are eligible to submit Form 15H. NRIs cannot submit Form 15H.

How to Fill Form 15G for PF Withdrawal?

  1. Download the Form 15G from the EPFO website or from any other reliable source.
  2. Fill in the details in the form carefully. Make sure to enter your correct PAN number and annual income.
  3. Sign the form in the presence of a witness.
  4. Attach a copy of your PAN card with the form.
  5. Submit the form to your EPFO office along with your PF withdrawal request.

What is the income limit for TDS on bank FDs? 

The interest income limit for TDS ₹40,000 for non-senior citizens and ₹50,000 for senior citizens. Non-senior citizens have to fill form 15G and senior citizens will have to fill 15H to avoid TDs deduction.

How to fill form 15G to avoid TDS on Interest income?

Here are the steps on how to avoid TDS on interest income using Form 15G:

  1. Download the Form 15G from the Income Tax Department website or from any other reliable source.
  2. Fill in the details in the form carefully. Make sure to enter your correct PAN number and annual income.
  3. Sign the form in the presence of a witness.
  4. Attach a copy of your PAN card with the form.
  5. Submit the form to the payer of interest income before the interest is credited to your account.

How to fill form 15G to avoid TDS on Interest income?

​​To avoid TDS on interest income, you must submit Form 15H to the payer of interest income before the interest is credited to your account. The form must be filled in correctly and signed by you. You must also enclose a copy of your PAN card with the form.

Here are the steps on how to avoid TDS on interest income using Form 15H:

  1. Download the Form 15H from the Income Tax Department website or from any other reliable source.
  2. Fill in the details in the form carefully. Make sure to enter your correct PAN number and annual income.
  3. Sign the form in the presence of a witness.
  4. Attach a copy of your PAN card with the form.
  5. Submit the form to the payer of interest income before the interest is credited to your account.

Is it mandatory to submit Form 15G and Form 15H to the income tax department?

You do not need to submit Form 15G and Form 15H directly to the Income Tax Department. You can submit it to the deductor to avoid TDS deduction subject to conditions.

Will my interest income be tax-free if I submit 15G and 15H?

No, submitting Form 15G/Form 15H will not make your interest income tax-free. Interest income from fixed deposits and recurring deposits is taxable. However, senior citizens are eligible for a deduction of Rs.50,000 on interest income from fixed deposits, post office deposits, and deposits held in cooperative societies under section 80TTB. You should only submit Form 15G/Form 15H if your tax liability on your total income is zero, along with other conditions.

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