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Akash Kumar
| Updated: 15 Nov, 2018 | Category: TDS Return

How Form 15G and 15H Helps To Save TDS on Interest Income

Form 15G and 15H

Form 15G and 15H are submitted to save the interest income earned to be deducted in the name of TDS. TDS means Tax Deducted at the source. Today, we will discuss how Form 15G and Form 15H helps to save TDS on Interest Income earned.

The concept of TDS was introduced with an object to collect tax from the various sources like income from business, profession or other income. Banks have to deduct TDS whenever the interest income is more than Rs 10,000 in a year.

The bank includes the deposits that are held in all its branches to calculate the exact limit. However, if the total income is below the taxable limit then you can easily submit Form 15G and 15H to the bank requesting them to not deduct any TDS on your interest.

Form 15G and Form 15H

Form 15H is for the senior citizen, those who are 60 years or old and while Form 15G is for everybody else. These forms are valid only for one financial year where you will submit the prescribed forms every year if you fall under the eligibility criteria. By submitting the form as the financial year starts you will be ensured that the bank does not deduct any TDS on the interest income incurred.

Eligibility Criteria To Submit Form 15G

The following are the eligibility criteria to submit Form 15G –

  • The applicant should be an individual or HUF or trust or any other assessee but not a company or a firm
  • A resident Indian
  • The applicant should be of less than 60 years of age
  • Tax calculated on the total income is nil

The total interest income for the year is less than the basic exemption limit for that year which is Rs 2, 50,000 for the financial year.

Eligibility Criteria To Submit Form 15H

The following are the eligibility criteria to submit Form 15H –

  • The applicant should be an individual.
  • A resident Indian
  • applicant should be 60 years old or will be 60 years old during the year
  • The tax calculated on the total income is Nil

Purpose Served With Form 15G or Form 15H

The Form can be submitted to the bank so that TDS is not deducted on interest incurred on income. The form should be retained for around 7 years. The places where you can submit the Form 15G or Form 15H are –

TDS on EPF Withdrawal

If the balance of EPF is withdrawn before the 5 years of continuous service then the TDS is deducted on the EPF balance. With effect from 1st June 2016, if you withdraw your EPF balance which amounts to more than Rs 50,000 then you have to submit the Form 15G or Form 15H. However, to file the form you have to be fall under the eligibility criteria stated above and the tax on the total income including the EPF balance withdrawn is ought to be nil.

Read our article:Form 26Q: TDS Return filing for Non-Salary Deductions – Know the Online Procedure

TDS on Income From Corporate Bonds

If you have the corporate bonds, TDS is deducted on them. Furthermore, if the total income amount exceeds Rs 5,000 then you can submit the Form 15G/Form 15H to the issuer requesting non- deduction of TDS.

TDS on Post Office Deposits

The post offices are also adopting a digitized system and with the digitalized system started accepting the Form 15G/ Form 15H if you have met the eligibility criteria.

TDS On Rent

If the rent payment exceeds Rs 1.8 lakhs, then the TDS will be deducted on the rent payment. The tax on the total income is nil, then you can submit the Form 15G/ Form 15H and request the tenant not to deduct TDS. This is effective from 1st June 2016.

TDS on Insurance Commission

If the amount of insurance commission exceeds the Rs 15000 per financial year, then TDS will be deducted on Insurance commission. Effective from 01st June 2017[1] the insurance agent are also be eligible to submit Form 15G or Form 15H for non- deduction of the TDS if the tax on the tot income amounts to be nil.

How to Fill Form 15G- Important Requirement

  • Name of Assessee– fill your name as per income tax records
  • PAN number as per your PAN card
  • Basic Status – Whether you are an individual or HUF
  • Previous Year – means the current financial year for which you are filing up the form
  • Residential Status – the form should be only filled by Residents.
  • Details of address- Flat/Door/Block Number
  • Name of Premises
  • Road/Street/Lane
  • Area/Locality
  • Town/City/District
  • State
  • PIN Code
  • Email &Telephone no
  • If your income is above the taxable limit in any of the past 6 years, answer it with ‘yes’
  • If you answer yes then the mention the latest assessment year under which income is assessed with the taxable limit
  • Calculate the income on which TDS should not be deducted
  • Calculate the total income earned from all sources, salary, stipend, and interest income, any other income that you have earned during the year and don’t forget to mention the income earned and fall under Column 16.
  • Details of Form 15G other than this form if filed during any of the previous years or If you have filled Form 15G in the past then it is advisable to mention clearly the total number of Form 15G filed with the total income in the past previous year
  • Details of income for which declaration is filed and the identification number of the reliable the account should state the nature of the income, the deduction under section 80C, 8CCC, and 80CCD if any,
  • Enter the details of the fixed deposit account number, recurring deposit details of NSCs, life insurance policy number, etc.
  • Signatures and the capacity when signing on behalf of a HUF or AOP                                                                            

The Important Point to Ponder- 

If in case you forget to submit Form 15 and Form 15H, then the following could be done-

  • File the income tax return to claim the refund of TDS
  • Immediately submit Form 15 G and Form 15H

Furthermore, if in case, your income has to club with someone else income then do not submit the Form 15G. The income from investment in RD or FD for a child or spouse will club with the income of depositor. PAN of the depositor is must for Form 15G & Form 15H to save TDS on interest income.

Read our article:TDS Returns Filing: Due Dates and Procedure for Filing

Akash Kumar

Akash Kumar is working as a content writer with Corpbiz, a Chartered Accountancy firm helping Startup & companies in setting up the business and complying with various tax laws applicable to Indian & foreign companies while establishing their business.

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