What is Form 15G and 15H in Income Tax?

Forms 15G and 15H are important documents in income tax used to avoid tax deduction at source (TDS) on interest income. They are self-declaration forms submitted to the bank or other payer requesting them not to deduct TDS on your interest earnings.

If you are an eligible Indian citizen and your total taxable income for the current financial year is below the basic exemption limit, you can claim exemption from TDS deduction on your interest income. This is where Forms 15G and 15H come into play. This blog will help you understand what is 15G form and how it can benefit you.

What is Form 15G and 15H?

Imagine a scenario where you earn interest on your Fixed Deposit (FD) with a bank. Traditionally, the bank would deduct tax on this interest income before crediting it to your account. This is TDS in action—a process to collect tax at the source of income. It applies to various income streams like salaries, FD interest, dividends, and rent. Forms 15 G and 15H are important forms that help save tax deduced at the source.

Income tax Form 15G allows you to claim an exemption from TDS (tax deducted at source) on your passive income, such as interest from term deposits or rental income. Like Form 15G, Form 15H helps you declare your income is below the limit and request non-deduction of TDS on interest income. Form 15H is for senior citizens aged 60 and above.

Benefits of Form 15G and 15H

Form 15G and 15H forms offer several benefits to the users. Let us take a look at the advantages of these forms:

Prevents TDS Deduction on Interest Income

Both forms are self-declarations submitted to a bank or payer to request that they not deduct tax at source (TDS) on your interest income. This is beneficial if your annual income falls below the basic exemption limit (currently ₹2.5 lakhs).

Improves Liquidity

You receive the full interest amount upfront without a TDS deduction, enhancing your cash flow and liquidity. This can help manage expenses, investments, or other financial needs.

Reduces Paperwork and Refund Hassle

Filing these forms eliminates the need to claim a refund later if TDS was deducted. This saves you time and paperwork associated with filing an income tax return solely to claim a refund.

Different Parts of Form 15G?

Form 15G is divided into two parts: one is to be filled by the declarant, and the other is for official use. Let us take a quick look at these different parts:

Part 1: To be filled by the declarant (you)

This section includes various fields you need to fill out with your information. Here are some key ones:

• Name of the assessee: Your full name as per your PAN card.
• PAN: Your Permanent Account Number.
• Mobile number & Email: Your contact details for communication.
• Address: Your complete residential address with PIN code.
• Residential status: Declare yourself as a “resident individual” (NRIs cannot use Form 15G).
• Previous Year: The financial year for which you claim non-deduction of TDS.
• Aggregate income amount: Your total taxable income for the previous year.
• Estimated total income of the previous year: Your estimated total income for the current financial year.
• Date: The date you are submitting the form.
• Signature: Your signature with your name below it.

Part 2: For official use only

This section is for the entity deducting TDS (like a bank) to fill out. You don’t need to worry about this part. It might include details like their Tax Deduction and Collection Account Number (TAN), address, and a space for them to acknowledge receipt of the form.

Different Parts of Form 15H?

Similar to Form 15G, the 15H form for senior citizens is also divided into two parts:

Part 1: To be filled by the declarant

This section focuses on your details and eligibility for claiming no TDS on interest income:

• Name and address: Your full name and permanent address as per your PAN card.
• PAN: Your Permanent Account Number.
• Date of Birth: This helps establish your senior citizen status.
• Residential status: Declare yourself as a “resident individual” (NRIs cannot use Form 15H).
• Whether assessed to tax under the Income Tax Act, 1961: Indicate “Yes” if your income has exceeded the taxable limit in the past six years.
• Estimated total income for which assessment is being made: Your estimated total income for the current financial year.
• Details of Form 15H submitted in the previous year: Mention if you submitted Form 15H previously and the number of forms submitted.
• Income for which 15H is filled: Here, you’ll specify the income for which you claim no TDS deduction. This might include:
• Nature of income (e.g., interest from fixed deposit)
• Identification number of the relevant account (e.g., fixed deposit account number)
• Section under which tax is deductible (usually irrelevant for senior citizens using Form 15H)
• Signature: Your signature with your name below it.

Part 2: For official use only

Like Form 15G, this part is reserved for the entity deducting TDS (like a bank) to fill out. They might record details like:

• Their name and address
• Your PAN number or Aadhaar number (if provided)
• Their TAN (Tax Deduction and Collection Account Number)
• Income paid for the financial year (filled by the bank after the year-end)
• Acknowledgement of receipt of the form

Eligibility Criteria for Form 15G Submission & Form 15H Submission

Understanding the criteria for submitting Form 15G and 15 H is important to avoid any last-minute hassles. The eligibility criteria for submitting Form 15G and Form 15H differ based on your age and income tax situation. Here are the details:

Form 15G Eligibility:

• Age: Applicable to individuals below 60 years old.
• Income: Total taxable income must not exceed the basic exemption limit for the relevant financial year (₹2.5 lakh or ₹3 lakh, depending on the tax regime chosen).
• You must have no tax liability for that financial year.
• Eligible Entity: Hindu Undivided Families (HUFs) can also use Form 15G if their taxable income falls under the basic exemption limit.

Form 15H Eligibility

• Age: Applicable only to resident senior citizens (aged 60 years or above).
• Income: There’s no strict income limit for senior citizens using Form 15H.
• Tax Liability: Even if their total income exceeds the exemption limit, their tax liability under section 87A must be nil to claim no TDS on interest income.
• Not Eligible: Non-resident Indians (NRIs) cannot submit Form 15H.

How to Fill Form 15G and 15H?

You can easily download and fill out Form 15G, available on the websites of most major Indian banks. The official website of the Income Tax Department offers Form 15H for seniors (above 60).

Download

• Major Banks: Head to your bank’s website and search for “Form 15G”. Most banks offer free downloads.
• Income Tax Department: If you are above 60, download Form 15H from the Income Tax Department website.

Filling

Follow these simple steps to fill out the forms:

• Step 1: Enter your name, status (individual or HUF), current financial year, and residential status.
• Step 2: Provide your address, PIN code, email address, and phone number.
• Step 3: Did your income exceed the taxable limit in the past six years? Answer yes/no.
• Step 4: Fill out the year of Taxable Income (if yes). If you answered yes, mention the year your income crossed the threshold.
• Step 5: Specify your total income to avoid TDS deduction (interest income, etc.).
• Step 6: Calculate your yearly income from all sources (salary, interest, etc.).
• Step 7: Mention the number of Form 15G declarations submitted in the previous year (if any).
• Step 8: Enter the total income reported on those forms.
• Step 9: List the income sources (fixed deposit account number, recurring deposit details, etc.) for which you claim exemption.
• Step 10: Indicate your authority if signing on behalf of a Hindu Undivided Family (HUF) or Association of Persons (AOP).

Things to Remember while Filing Form 15G & Form 15H

Here are some key points to keep in mind when filing Form 15G or 15H:

Eligibility

• Form 15G: Applicable to individuals below 60 years old, Hindu Undivided Families (HUFs) with total taxable income not exceeding the basic exemption limit (₹2.5 lakh or ₹3 lakhs, depending on the tax regime chosen).
• Form 15H: Applicable only to resident senior citizens (aged 60 years or above) even if their total income exceeds the exemption limit, but their tax liability under section 87A must be nil.

Truthful Declaration

Submitting these forms is a self-declaration that your income is below the taxable limit. There are penalties for falsely claiming exemption.

Validity

These forms are valid for only one financial year and do not replace filing your Income Tax Return (ITR).

Submission Frequency

You must submit the form at each bank branch or any other institution from which you expect interest income to exceed the exemption limit (₹40,000).

Late Submission

If you submit the form late and TDS is deducted, you can claim a refund by filing your ITR.

Form Selection

Choose the correct form based on your age - Form 15G for individuals below 60 and HUFs, Form 15H for senior citizens.

Where can you submit Form 15G or Form 15H apart from Banks?

In addition to banks, you can submit Form 15G or 15H to the following entities:

• Insurance companies: If you are receiving interest income from insurance policies.
• Post offices: For interest earned on savings accounts or deposits.
• Income tax department offices: You can submit the form physically.
• Employer’s office: If you claim no TDS on salary interest income.
• Online income tax portal: This is an option for some taxpayers.
• It is advisable to check with the specific entity where you want to submit the form to confirm their process.

When should you submit Form 15G and Form 15H?

To avoid a TDS deduction, you should submit Form 15G or 15H before the interest income is credited to your account. Here is the timeline to submit Form 15G and Form 15H:

• Submit anytime during the financial year: This is generally recommended for those eligible.
• Before interest payout: If you know the date interest is credited, submit the form beforehand.

Penalties and Risks for False Declarations on Form 15G

Submitting Form 15G with false information to avoid tax deductions at source (TDS) on your fixed deposit interest income is a serious offense with potentially harsh consequences. Section 277 of the Income Tax Act of 1961 clearly states that making a false declaration on Form 15G to evade TDS is punishable by fine and imprisonment. Penalties include:

• Major Tax Evasion (> ₹Lakh): If the false declaration aimed to avoid paying more than ₹1 lakh in taxes, you could face imprisonment for 6 months to 7 years and a hefty fine.
• Minor Tax Evasion (≤ ₹1 Lakh): In other cases, the imprisonment term ranges from 3 months to 3 years, accompanied by an appropriate fine.

Key Takeaways

• Form 15G is for individuals under 60 and Hindu Undivided Families (HUFs), while Form 15H is for senior citizens aged 60 and above. NRIs cannot use these forms.
• Both forms are divided into Part 1 for the declarant to fill and Part 2 for official use by the entity deducting TDS (like banks).
• These forms help avoid TDS on interest income, provided your annual income is below the exemption limit.
• They also ensure you receive full interest without deduction, enhancing cash flow.
• Apart from banks, these forms can also be submitted to insurance companies, post offices, employers, and income tax department offices.

Conclusion

By understanding and utilizing Forms 15G and 15H, you can claim exemption from TDS and maximize your returns on your fixed deposits. Remember, responsible financial management starts with accurate information and compliance. Do not miss this opportunity to simplify taxes and boost your financial well-being.

FAQs on Form 15G and 15H