What can be done to make sure that the bank does not deduct TDS interest in case your total income is not taxable? In this case, submitting Form 15G and 15H to the bank is the answer! The fact is that banks have to deduct TDS when the interest income is more than Rs. 10, 000 in a financial year. The bank includes deposits that are held in all its branches to compute this limit. But in case an individual’s total income is below taxable limit, then he can submit Form 15G and Form 15H to the bank. By submitting these forms to the bank, you can request them to not deduct TDS on the interest amount and save yourself from the hassle of claiming refunds.
Both Form 15G and Form 15H will make sure that TDS is not deducted on your income. Form 15H is a declaration under sub-section (1C) of section 197A of the Income Tax Act, 1961. And Form 15G is a declaration under sub-sections (1) and (1A) of section 197A of the Income Tax Act of 1961.
Some banks also provide an option to submit these forms online. But make sure you have a PAN card before applying for these forms. Remember, that both form 15G and 15H are only valid for one financial year. Therefore, if you are eligible you need to send these forms every year. Besides, submitting these forms as soon as the financial year begins confirms that the bank does not deduct any TDS on your interest income.
However, there are conditions you need to fulfill while submitting form 15G and form 15H.
You have to be an individual or a HUF (Hindu Undivided Family)
You need to be less than 60 years of age.
You need be an Indian resident.
The tax calculated on your income is to be NIL.
The total income for the year has to be less than the basic exemption limit of that year. i.e. Rs 2,50,000 for financial year 2017-18 (AY 2018-19)
You are an individual
You need to be an Indian Resident
You have attained 60 years of age or are going to turn 60 years during the year for which you are submitting the form
Tax calculated on your Total Income is to be nil
| Person / Category | Rohan | Anita | Nikhil | Neha |
|---|---|---|---|---|
| Age | 50 years | 21 years | 65 years | 68 years |
| Salary | Rs. 1,80,000 | - | – | – |
| Pension | – | – | 1,00,000 | – |
| Fixed Deposit interest income | Rs. 85,000 | Rs. 2,60,000 | Rs. 1,80,000 | Rs. 3,30,000 |
| Total Income before allowing section 80 Deductions | 2,65,000 | 2,60,000 | 2,80,000 | 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 |
| Minimum exempt income | Rs. 2,50,000 | Rs. 2,50,000 | Rs. 3,00,000 | Rs. 3,00,000 |
| Eligible to submit Form 15G | Yes | No | No | No |
| Eligible to submit Form 15H | No | No | Yes | Yes |
| Explanation | Form 15G can be submitted since Rohan's age is less than 60 years. Also, Total tax is nil and interest income is less than minimum exempt income. | Form 15G cannot be submitted since Anita's interest income is more than the basic exemption limit. | Form 15H can be submitted as Nikhil's age is more than 60 years and tax calculated on total income is nil. | Form 15H can be submitted as Neha's age is more than 60 years and tax calculated on total income is nil. Form 15H can be submitted although interest income exceeds basic exemption limit. |
TDS on EPF withdrawal : TDS is deducted on EPF (Employee’s Provident Fund) if you happen to withdraw before 5 years of continuous service. In case you happen to serve for less than 5 years and plan to withdraw your EPF balance of more than Rs. 50,000 (Rs. 50,000 effective 1 st June 2016, Rs. 30,000 was prior to that), you are eligible to submit form 15G/15H. But above conditions (Conditions to fulfill to submit Form 15G/ Conditions to fulfill to submit Form 15H) have to be fulfilled to apply for these forms.
TDS on post office deposits : Nowadays, post offices are digitized and hence, deduct and accept Form 15G/Form 15H, if you happen to meet the conditions applicable to submit them.
TDS on Insurance Commission : TDS gets deducted on Insurance commission if it exceeds Rs. 15,000 per financial year. However, with effect from 1st June 2017 an insurance agent can submit Form 15G/Form 15H for no deduction of TDS if the tax on their total income is nil.
TDS on income from corporate bonds : TDS is deducted on corporate bonds if the income amount from them exceeds more than Rs. 5,000. So, you can request for non-deduction of TDS by submitting Form 15G/Form15H.
TDS on rent : TDS is also deducted if total rental payment in a year exceeds Rs. 1.8 lakhs. In case your total income is nil, you can submit Form 15G/Form15H to request the tenant to not deduct TDS (applicable from 1st June 2016)
Points to remember
As per the Indian Law, if an individual has provided incorrect information, he/she can be sentenced for 3 months of imprisonment.
While submitting Form 15G/15H, make sure that you receive the acknowledgment. And if any dispute arises, acknowledgment of submission of PAN details can be very useful.
A PAN card is essential for an individual to submit Form 15G/Form 15H. Without PAN card bank would not accept Form 15G and Form 15H.
The following steps will help you to fill Form 15G
Step 1: Name of the Assesse (Declarant)- Name has to be entered as per your income tax records.
Step 2: PAN of the Assesse- Enter PAN number as per your PAN card
Step 3: Status- State whether you are an Individual or a HUF
Step 4: Previous Year- Mention current financial year for which you are filling up the form
Step 5: Residential Status- Only an Indian Resident can submit this form.
Step 6: Flat/Door/Block No- Mention details of your address flat no, door no etc.
Step 7: Name of Premises- Mention details of your Apartment name, society, chawl number etc.
Step 8: Road/Street/Lane- Mention street name here
Step 9: Area/Locality- Mention details of your area or locality
Step 10: Town/City/District – Mention the exact name of your city, town etc. like (Mumbai, Delhi)
Step 11: State – Mention which state you belong to (eg: Maharashtra, Karnataka etc.)
Step 12: PIN- Mention your Pin-code number here.
Step 13: Email- (eg:ammu@xyz.com)
Step 14: Telephone number- 900000056
Step 15:
Whether assessed to tax under the income tax act, 1961? - Do answer yes, if your income was above the taxable limit in any of the past 6 years.
If yes, latest assessment year for which assessed- Here, mention the latest year in which your income was above taxable limit.
Step 16: Estimated income for which declaration is made - Total (sum) of income on which TDS should not be deducted.
Step 17: Estimated total income of the previous year in which income mentioned in column 16 to be included - Compute the sum of all income sources, salary, interest income, or any income that you have earned during the year. Note: Also include the amount mentioned in step 16 (above)
Step 18: Details of Form 15G other than this form filed during the previous year, if any; total number of Form no 15G filed and an aggregate amount of income for which form 15G filed - Mention the total number of Form 15G filled in the past with total income for which Form 15G was filed.
Step 19: Details of income for which declaration is filed; Identification number of relevant investment/account etc. Nature of Income, Section under which tax is deductible, and amount of income- Mention details of fixed deposit account number, recurring deposit details of NSCs, life insurance policy number etc.
Step 20: Signatures- Mention if you are signing on behalf of a HUF or AOP
Do I have to submit form 15G and 15H to the Income Tax Department?
No, you don’t need to submit these forms to the Income Tax Department directly. These forms are to be submitted by the deductor, post which he/she will submit Form 15G/15H to the Income Tax department.
Will filling form 15G/15H mean that my interest rate is not taxable?
From 15G/15H is can only be considered as a declaration that TDS will not be deducted on your interest income considering your total income is nil.
Is HUF (Hindu Undivided Family) allowed to submit Form 15G and Form 15H?
A HUF can submit Form 15G if the following conditions are met.
You need to be less than 60 years of age.
You must be an Indian resident.
The tax calculated on your income has to be NIL.
The total income for the year has to be less than the basic exemption limit of that year. i.e.: Rs. 2,50,000 for financial year 2017-18 (AY 2018-19)
However, Form 15H can only be submitted by Individuals.
Should I submit Form 15G/Form 15H at all bank branches?
Despite the fact that DS is deducted when total interest earned from all branches exceeds Rs. 10,000 in total, submitting Form 15G/15H at all bank branches is essential.
Are NRI’s allowed to submit Form 15G/15H?
No, Form 15G/15H cannot be submitted by NRI’s, these can only be submitted by Resident Indians.
