tdsmaster.com




Home Investment Master NRI Master Glossary Contact us

Avoid TDS by Submitting Form 15G/ 15H


All Banks and Financial Institutions as per Section 194A of the Income Tax Act must deduct tax on all FD interests exceeding Rs. 10000 & Rs.50000 (in case of senior citizens) in a financial year. Thus whenever total interest income from bank exceeds Rs. 10000/50000, Bank deducts TDS @10% (if PAN is not declared @ 20%).

People with total income below taxable limit have an option under section 197A of the Income Tax Act to submit Form 15G/ 15H declaring to Bank that their total income will be below taxable range. Banks then will not deduct TDS on the interest incomes for PANs on which a valid 15G/15H is submitted.

Why submit 15G/15H?
If a person has total FD interest income above Rs. 10000, tax will be deducted by bank. At the same time if that person's total income is below basic exemption limit  there will be no tax payable. Now he can not go to bank and just ask the refund of tax deducted, because banks can not refund the tax deducted by them. To claim the tax deducted on his income he will be required to file his Income Tax Return and only then the refund of TDS deducted by bank will be granted by Income Tax Department.

In such cases where a person's total income is below taxable limit and interest on FD is more than Rs. 10000/ Rs.50000, if he submits Form 15G/15H to the bank, bank will not deduct TDS.

Forms 15G/ 15H are a declaration by the individual, that his/her total income from all the sources is less then the taxable range and therefore no tax shall be deducted on his/her interest income.

Form 15G:
(For individuals, HUF not being senior ctizens)

Form 15 G is a self declaration form for non deduction of tax on interest income to be submitted to the banks by individuals who are not senior citizens and who have total income (before deductions) below taxable limit.

Who can submit Form 15G?

Only a person not being a senior citizen satisfying following two conditions can submit Form 15G -
  • Tax liability on estimated total income for the year under cosideration shall be NIL.
  • Total interest income from all the banks and sources shall not exceed the basic exemption limit
Form 15 G can be downloaded from  the national website of Income Tax India. Now Form 15H can be submitted online through internet banking.

Form 15H:
(For senior citizens)

Form 15 H is a self declaration form for non deduction of tax on interest income to be submitted to the banks by senior citizens(individuals above the age of 60 years) and who have net total income(after deductions) below taxable limit.

Who can submit Form 15H?

Only a senior citizen satisfying following condition can submit Form 15H -
  • Tax liability on estimated total income for the year under cosideration shall be NIL.
There is no other condition for submitting Form 15H.

Form 15H can be downloaded from  the national website of Income Tax India. Now Form 15H can be submitted online through internet banking.


When to submit Form 15G/15H

One can submit Form 15G/15H any time during a year but the best time to submit Form 15 G/ Form 15H is at the start of  the financial year ie. during the month of April. Submitting the form at the start of year will save you from the deduction of TDS on your interest income for full year. So it will be possible to avoid TDS on entire interest income.

Form 15G/15H  are to be submitted on yearly basis. Form submitted in a year is valid for that year only. For example if someone has a FD for 3 years and his total estimated income for these three years is expected to be below taxable limit, to avoid TDS he must submit Form 15G/ 15H in each of the three years.

Some important facts to know while submitting Form 15G/ 15H

  • NRI's are not eligible to furnish Form 15G/15H.
  • Form 15G/15H is submitted in duplicate, one copy is kept by bank and the second copy is sent by bank to Income Tax department.
  • Now Form 15G/H can be submitted online through net Banking at your Banks site.
  • As per RBI guidelines banks are now required to issue an acknowledgement of receipt of the form.
  • Banks deduct tax not only on interest paid but also on accrued interest, so in case of an FD for 3 years TDS will be deducted each year on the interest due.
  • TDS is not deducted on savings bank interest even if total savings bank interest exceeds Rs. 10000.
  • As forms are submitted at the start of the financial year, the declaration is made about estimated total income.

Links for :
Taxability of Interest Incomes
Taxability of Pension Received
TDS on Purchase of House Property
Capital Gain on sale of House Property
Basic exemption limit for the financial year 2013-14
Basic exemption limit for the financial year 2012-13




content and images copyright tdsmaster.com, 2011-2020