Form 15G & 15H: How To Save TDS On Interest Income

Income Tax

If your total income falls below the taxable limit and you are wondering how to avoid 10% Tax Deducted at Source or TDS on interest income, you must submit Form 15G or 15H. Taxpayers with an annual interest income of less than Rs.40,000 or Rs.50,000 can file any of these forms to inform the Income Tax (IT) Department about TDS exemption. 

Now, you must be wondering which form to file out of these two. To clarify your doubts, here is a detailed explanation on the difference between form 15G and form 15H.

What is Form 15G? 

15G Form is a self-declaration document that individuals below 60 years, a trust, or a Hindu Undivided Family (HUF) can file to receive TDS exemption. You can file Form 15G to your bank so as to request them not to deduct TDS on interest income provided your income falls below the total exemption limit.

What is Form 15H? 

This self-declaration form is only applicable to individuals aged over 60 years or senior citizens. This is because the TDS exemption limit for senior citizens is Rs. 50,000. 

So, if your total interest income in a year adds up to less than Rs. 50,000, you can fill out and submit Form 15H to earn interest without tax deducted at the source.

What is TDS?

TDS or Tax Deducted at Source was introduced with the sole aim of collecting tax from the source of income. TDS is imposed on various sources of income, including but not limited to salary, interest earned, and commission received. TDS varies based on the income source.

To avail of TDS deduction, individuals and other mentioned entities can fill out and submit Form 15G to their concerned bank’s from which they earn interest.

Purpose to Fill Form 15G and 15H

Both Form 15G and Form 15H are self-declaration forms that you can submit to claim TDS exemption. It’s valid for individuals who are below 60 years of age and have an income threshold below the taxable limit. 

Who is Eligible to File Form 15G and Form 15H? 

You must have developed a basic idea from the above explanation of the different requirements for Form 15G and 15H. However, there are a few more things to consider before filling in one of these forms.

Eligibility Criteria for Form 15G

Individuals must have both annual taxable income and total interest income below the exemption limit of Rs. 2.5 lakh. 

For instance, suppose there’s a 32-year old individual with Rs. 2.8 lakh annual income and Rs. 20,000 annual interest income. He cannot use this form despite interest earnings lower than the exemption limit of Rs. 40000 because his annual income exceeds Rs. 2.5 lakh.

Conversely, if the person’s interest income was Rs. 80000, but his annual taxable earnings amounted to Rs. 2.4 lakh, he’d be eligible to file Form 15G. However, if a person’s annual interest income is more than the taxable limit of Rs. 2.5 lakh, they’d not be eligible to file this form, irrespective of their annual taxable income. 

Besides, individuals can use Form 15G for PF withdrawal of more than Rs. 50,000 if the service period is less than 5 years. They can also use this form for other cases involving TDS, such as post-office deposits of over Rs. 10,000, dividend incomes exceeding Rs. 5000, and an annual rental income of more than Rs. 2.4 lakh, given they satisfy the conditions mentioned above.

Eligibility Criteria for Form 15H

Individuals above the age of 60 can have interest income exceeding the tax exemption limit of Rs. 3 lakh, given their annual taxable earnings after deduction, is below that. At the same time, their income for the previous year must have remained below the taxable limit.

For instance, a 71-year old individual with Rs. 2.65 lakh annual income and Rs. 3.2 lakh interest earnings a year can submit Form 15H. However, a person is not eligible to submit Form 15H if their taxable income after deduction is above Rs. 3 lakh even though their annual interest earnings are below Rs. 50000.

How to Fill Form 15G and 15H?

If you are unaware of the detailed filling procedure, here is a step-by-step guide.

1. Visit your concerned bank’s official website to download Form 15G or 15H.
2. Part-1 of this form comprises the taxpayer’s declaration under Section 197A (1) and (1A) under the Income Tax Act. 
3. Fill this part with details such as your name, employment status, PAN, address, and contact information.
4. Also, check the box for “Whether assessed to tax under the Income-tax Act” if your income ever crossed the taxable limit in the past 6 years. Mention the assessment year.

Provide other necessary information and sign the form.

Instructions to Fill Form 15G

1. Name of the declarant
2. PAN (Permanent Account Number) of the declarant
3. Income tax status
4. Select the previous year for which you are claiming TDS exemption
5. Mention your residential status. Note that NRIs are not allowed to file form 15G.
6. Address: Mention your residential address
7. Email and phone: Enter your functional email ID and phone number
8. Assessed to tax under the Income Tax Act, 1961. Mention “Yes” if you were assessed to tax for any of the previous assessment years
9. If you have ticked “Yes”, mention the latest assessment year
10. Mention the estimated income for which the declaration is made
11. Mention the total estimated income of the financial year (previous year)
12. If you have already filed Form 15G anytime during the financial year, you need to provide complete details of your previous declaration along with an estimated amount of income
13. Lastly, you need to mention the investment details for which you are filing the declaration. Provide your investment account number. Once done, check if all the data mentioned are correct.

How to Fill Form 15G for PF Withdrawal

You can submit your Form 15G for PF withdrawal both online – through the EPFO portal and offline – by physically submitting your form to EPFO regional office.

If you want to submit Form 15G for PF online, here’s everything you need to do.

1. Login to the EPFO UAN unified portal
2. Click on Online services
3. Navigate to Online Claim
4. Fill in the details
5. You will be required to verify the last 4 digits of the phone number
6. You will be able to see your EPF withdrawal form

How to Submit  Form 15G and 15H? 

Individuals can submit these forms to their respective bank branches offline. You can also avail of the online process as follows.

1. Log in to your account on your concerned bank’s website.
2. Navigate to the “e-Services” tab and select “Form 15G/Form 15H”.
3. Select your CIF number on the new tab and hit “Submit”.
4. Select the bank’s branch code, where you want to submit your form and select “Submit”.
5. Cross-check the details of your filled Form 15G/15H displayed on the next screen, and click on “Confirm”.
6. Now, enter the OTP received on your mobile number and hit “Confirm”.

You will receive a UIN number, which will be downloadable after successful submission. 

Now that we’ve discussed everything concerning Form 15G and 15H, let’s summarise their differences with a table. 

Difference between Form 15G and Form 15H 

Note that in both cases, individuals must submit the application form to all branches of a financial intuition from which they are receiving income. Also, make sure to complete the submission before the transfer of the first interest. This way, you can prevent tax deduction right from the beginning and would not need to wait for a refund after IT filing.

Penalty for Wrong Declaration in Form 15G/Form 15H

Any kind of wrong information mentioned in Form 15G or Form 15H can attract penalties under Section 277 of the Income Tax Act, 1961. Individuals making false claims can face imprisonment ranging from 3 months to 2 years along with a fine. If there’s a case of tax evasion exceeding Rs.25 lakh, the term can be extended up to 7 years.

Final Word 

Whichever form you submit, note that a false declaration may result in imprisonment. Therefore, make sure you understand the differences between the two. Meet the mentioned criteria before utilizing Form 15H or Form 15G for PF, FD, or other investment returns.

FAQs on Form 15G & 15H

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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.