Everything You Need To Know About Form 15H and Form 15G

Individuals with total income below the taxable limit can ask their bank to not deduct TDS on interest payments by submitting Form 15H and Form 15G. These forms allow you to claim receipts without having to pay taxes on them.

When an individual’s interest income exceeds Rs.10,000 per year, banks in India are required to deduct TDS. To determine this limit, the bank considers all deposits held in all branches. If an individual’s total income is below the taxable limit, he or she can request that the bank not take TDS on the interest amount using Forms 15G and 15H.

Form 15H

Form 15H is a declaration submitted under sub-section (1C) of section 197A of the Income Tax Act of 1961 by a person aged 65 or older who wishes to claim certain receipts without paying tax. The following are the requirements for submitting this declaration:

• Individuals who have reached the age of 65 at the time of submission can only submit Form 15H. (As of July 1, 2012, the age restriction has been reduced to 60.)
• The preceding year’s projected tax should be zero. Because the individual’s income should be below the taxable amount, he or she should not have paid tax the previous year.
• This form should be submitted to all deductors to whom a loan was advanced, i.e., this form should be submitted to each bank branch where the individual is collecting interest.
• Before paying the first interest, you must submit Form 15H to the bank. This is not required, but it will prevent the TDS from being deducted by the bank.
• If the interest from a single branch exceeds Rs.10,000 per year, a Form 15H must be presented to the banks.
• If the interest income from any source other than a deposit, such as interest on a loan, advance, debentures, bonds, and so on, reaches Rs.5,000 yearly, Form 15H will be required to be filed.

Form 15G

Form 15G is a declaration issued under section 197A of the Income Tax Act of 1961, sub-sections (1) and (1A), by an individual (not a company or firm) claiming certain receipts without tax deduction. The qualifying requirements for submitting this form are mentioned below:

• Individuals under the age of 65, as well as Hindu Undivided Families, can file Form 15G. (HUF).
• Before the first payment of interest on a fixed deposit, fill out Form 15G.
• This form should be submitted to all deductors to whom a loan was advanced, i.e., this form should be submitted to each bank branch where the individual is collecting interest.
• This form can only be filled out by people who owe no taxes on their total income.
• The person must be an Indian who lives in the United States.
• The total interest income for that year is less than the minimum exemption amount. For the 2015-16 fiscal year, the minimum exemption amount is Rs.2,50,000.

Purposes for submitting Form 15G/15H

Forms 15G and 15H are typically filed to banks to avoid TDS on interest deductions, although they can also be submitted for a variety of other purposes.

• If an individual withdraws their EPF before completing five years of continuous service, TDS is deducted. If you have an EPF balance of more than Rs.50,000 and want to withdraw it before completing 5 years of continuous service, fill out Form 15G/15H.
• If an individual’s income from corporate bonds reaches Rs.5,000, he or she is eligible for a TDS deduction.
• If the individual meets the eligibility criteria, digitised post offices will also conduct TDS and receive Form 15G/15H.
• TDS on rent is deducted if the total rental payment for the year exceeds Rs.1.8 lakhs. If the individual’s total income is zero, he or she can request that the renter not deduct TDS using Form 15G/15H.

Some Important Facts

• A person can only submit Form 15G/15H to a bank with a valid PAN; otherwise, the tax will be deducted at a rate of 20%. It’s a good idea to include a copy of your PAN card with your cover letter.
• When filing Form 15G/15H, the individual should ensure that he or she receives an acknowledgement. If there is a dispute with the bank, the acknowledgement of the submission of PAN details is useful.
• The individual will need to give the data of the Form 15G/15H that he or she has filed to other banks, as well as the interest income amount specified in these forms, according to the amended form.
• Because the individual has supplied his or her PAN, the evaluating officer will have access to all of the information the individual has provided to other banks and will be able to detect any inaccurate information.