What can you do to make sure the bank does not deduct TDS on interest if your total income is not taxable?
Banks have to deduct TDS when your interest income is more than Rs.40,000 in a year for individuals other than senior citizens (for senior citizens, the limit is Rs.50,000) under section 194A of the Income Tax Act. The bank aggregates the interest on deposits held in all its branches to calculate this limit.
However, if your total income is below the taxable limit, you can submit Form 15G and 15H to the bank and request them not to deduct any TDS.
What are Form 15G and Form 15H?
Form 15G and Form 15H are self-declaration forms that a taxpayer submits to the bank requesting not to deduct TDS on interest income as their income is below the basic exemption limit.
For this, providing PAN is compulsory. Some banks allow you to submit these forms online through the bank’s website.
Type of Form | FORM 15G | FORM 15H |
Type of Taxpayer | Resident Individual with age less than 60 years or HUF or trust or any other assessee but not a company or a firm | Resident individual aged 60 years or more i.e. Senior citizen. |
Condition | 1. Tax calculated on your total income is Nil | 1. Tax calculated on your Total Income is Nil |
2. The total interest income subject for the year is less than the basic exemption limit of that year, which is Rs.2.5 lakhs(old regime) or Rs.3 lakhs(new regime) for financial year 2023-24 (AY 2024-25) |
| |
Only for Residents | Please note that benefits of Form 15G and 15H cannot be claimed by Non-residents. | |
Example to Understand Who Can Submit Form 15G and Form 15H
Age | 50 years | 21 years | 65 years | 68 years |
Salary | Rs. 1,80,000 | – | – | – |
Pension | – | – | Rs. 1,00,000 | – |
FD interest income | Rs. 85,000 | Rs. 2,60,000 | Rs. 1,80,000 | Rs. 3,30,000 |
Total income before Section 80 deductions | Rs. 2,65,000 | Rs. 2,60,000 | Rs. 2,80,000 | Rs. 3,30,000 |
Deductions under Section 80 | Rs. 45,000 | Rs. 30,000 | Rs. 10,000 | Rs. 55,000 |
Taxable income | Rs. 2,20,000 | Rs. 2,30,000 | Rs. 2,70,000 | Rs. 2,75,000 |
Basic Exemption limit | Rs. 2,50,000 | Rs. 2,50,000 | Rs. 3,00,000 | Rs. 3,00,000 |
Age | less than 60 years | less than 60 years | more than 60 year | more than 60 year |
Tax on total income is Nil | Yes | Yes | Yes | Yes |
Interest income is less than basic exemption limit | Yes | No | N.A. | N.A. |
Eligible to submit Form 15G/15H | Yes, Form 15G | Cannot submit | Yes, Form 15H | Yes, Form 15H |
Important Points for Understanding
- Form 15G and 15H are applicable only for ‘residents’, hence a non-resident cannot take the benefit of these forms.
- A senior citizen of age 68 years in the above example can submit form 15H as his tax liability is Nil.
- Condition of interest income being more than the basic exemption limit is applicable for form 15G only and not for form 15H. Form 15H can be submitted by senior citizens even if the interest income is more than the basic tax exemption limit, provided that the taxable income (after deductions) is below the exemption limit.
Form 15G Sample
Form 15H Sample
When Should You Submit Form 15G and Form 15H?
Form 15G and Form 15H are valid for one financial year. So, please submit these forms every year at the beginning of the financial year. This will ensure that the bank does not deduct any TDS on your interest income.
Check your total tax payable with the help of our Calculator
Forgot to Submit Form 15G or Form 15H?
A lot of taxpayers forget to submit Form 15G and Form 15H on time. In such a situation, the bank might have already deducted the TDS. Based on your situation, you can do any of the following.
- File your income tax return to claim refund of TDS: The only way to seek refund of excess TDS deducted is by filing your income tax return. Banks or other deductors cannot refund TDS to you, since they have already deposited it to the income tax department. Income tax department will refund excess TDS, after you file an income tax return.
- Submit Form 15G and Form 15H immediately: Most banks deduct TDS every quarter. If you forget to submit Form 15G or Form 15H, don’t worry. Submit it at the earliest so that no TDS is deducted for the remaining financial year. To claim refund of excess TDS deducted, start filing your return on EasyTax.
Where Can You Submit Form 15G or Form 15H Apart From Banks?
While these forms can be submitted to banks to make sure TDS is not deducted on interest, there are a few other places too where you can submit them.
TDS on EPF withdrawal
TDS is deducted on EPF balance if withdrawn before 5 years of continuous service.
If you have had less than 5 years of service and plan to withdraw your EPF balance of more than Rs.50,000 , you can submit Form 15G or Form15H. However, you must fulfil conditions (listed above) to apply for these forms. It means the tax on your total income including EPF balance withdrawn should be nil.
TDS on income from corporate bonds
If you hold corporate bonds, TDS is deducted on them if your income from them exceeds Rs 5,000. You can submit Form 15G or Form 15H to the issuer requesting non-deduction of TDS.
LIC maturity proceeds
With effect from October 2014, if the amount received from a policy exceeds Rs 1 lakh and if the maturity proceeds are taxable, 1% TDS shall be deducted by the insurer before paying.
From 1st September 2019, TDS is 5% on the amount of income comprising the proceeds paid or payable upon maturity.
In case of failure to submit PAN details of the deductee to the LIC companies, TDS to be deducted at the rate of 20%.
You can submit Form 15G/Form 15H to request that no TDS be deducted since tax on your total income is nil.
TDS on post office deposits
Post offices that are digitised also deduct TDS and accept Form 15G or Form 15H, if you meet the conditions applicable for submitting them.
TDS on rent
TDS is deducted on rent exceeding Rs 2.4 lakh annually. If tax on your total income is nil, you can submit Form 15G or Form 15H to request the tenant to not deduct TDS (applicable from 1 April 2019).
TDS on Insurance Commission
TDS is deducted on insurance commission, if it exceeds Rs 15000 per financial year. However, insurance agents can submit Form 15G/Form 15H for non deduction of TDS if tax on their total income is nil.
TDS on Dividends
If the dividend income exceeds Rs. 5000, then TDS is required to be deducted. Form-15G/Form-15H can be submitted for non/lower deduction of TDS.
Important Information for Deductors
If you are a TDS deductor, the Income-tax Act requires you to allot a Unique Identification Number or UIN to everyone who submits the Form 15G/Form 15H. You must file a statement of Form 15G/Form 15H on a quarterly basis and must retain these forms for 7 years.
How to fill Form 15G?
- Name of Assesse (Declarant) – Enter your name as per income tax records & PAN number as per your PAN card,
- Status – Input whether you are an individual or HUF
- Previous Year –Input the current financial year for which you are filing up the form
- Residential Status – this form can only be filled by residents. Check your residential status here
- Fill in Address details along with PIN code, email, and telephone number.
- Whether assessed to tax under the income tax act, 1961? – If your income was above the taxable limit in any of the past 6 years, answer this question with ‘yes”.
- If yes, the latest assessment year for which assessed – mention the latest year in which your income was above the taxable limit.
- Estimated income for which declaration is made – fill sum of interest or other income on which TDS should not be deducted.
- Estimated total income of the previous year in which income mentioned in column 16 to be included – Calculate your total income from all sources, salary, stipend, interest income, any other income that you have earned during the year. Include the income mentioned in 16, above
- Details of Form 15G other than this form filed during the previous year, if any;- please mention the total number of Form 15G filed for that particular year.
- Also, fill the aggregate amount of income for which form 15G filed – Also provide the total income for which Form 15G was filed
- Fill details of income for which declaration is filed; Identification number of relevant investment/account etc, nature of income, Section under which tax is deductible, Amount of income – Provide fixed deposit account number, recurring deposit details, details of NSCs, life insurance policy number etc. (many of these are chargeable to tax under section 56 of the income tax act)
- Signatures – mention your capacity when signing on behalf of a HUF or AOP
Do not submit the form if such income has to be Clubbed with the income of another person
Do not submit Form 15G, if your income has to clubbed with someone else. Interest income from an FD for a non-earning spouse or a child has to be clubbed with the income of the depositor. In such a case Form 15G is not valid. PAN of the depositor is mandatory and TDS should be deducted in the name of the depositor.
Download Form 15G/15H
Click here to go to link for ‘Fillable Form 15G/ 15H'
Related Articles:
How to Download and Fill Form 15G For PF Withdrawal?
How To File e-Form 15CA and 15CB?