Herald: Declaration Forms 15G and 15H to save TDS on Interest Income

Declaration Forms 15G and 15H to save TDS on Interest Income

10 Dec 2018 07:17am IST

Report by
Prabhu Verlekar

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10 Dec 2018 07:17am IST

Report by
Prabhu Verlekar

Banks have to deduct TDS when interest income from term deposits or recurring deposits is more than Rs 10,000 in a financial year. The bank includes deposits held in all its branches to calculate this limit. But if your total income is below the taxable limit, you can submit Form 15G and 15H to the bank requesting them not to deduct any TDS on your interest.


What is Form 15G and Form 15H?

Form 15G and Form 15H are forms you can submit to make sure TDS is not deducted on your income if you meet the conditions mentioned below. Also, you must have a PAN before applying for these forms. Some banks allow these forms to be submitted online through the bank’s website. 

Form 15H is for senior citizens, those who are 60 years or older; while Form 15G is for everybody else.

Form 15G and Form 15H are valid for one financial year. So you have to submit these forms every year if you are eligible. Submitting them as soon as the financial year starts will ensure the bank does not deduct any TDS on your interest income.


Conditions you must fulfill to submit Form 15G:

1.

You are an individual or HUF

2.

You must be a Resident Indian

3.

You should be less than 60 years old

4.

Tax calculated on your Total Income is nil

5.

The total interest income for the year is less than the minimum exemption limit of that year, which is Rs 2,50,000 for financial year 2018-19


Conditions you must fulfill to submit Form 15H:

1.

You are an individual

2.

You must be a Resident Indian

3.

You are 60 years old or will be 60 years old during the year for which you are submitting the form

4.

Tax calculated on your Total Income is nil

l See Table

A lot of taxpayers forget to submit Form 15G and Form 15H timely. In such a situation TDS may already be deducted by the bank.

The only way to seek a 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

TDS is usually deducted quarterly. If you forgot to submit Form 15G/Form 15H, don’t worry. Submit it at the earliest available opportunity, so that no TDS is deducted for the remaining financial year.

NRIs cannot submit Form 15G or Form 15H. These can only be submitted by resident Indians. You must submit at each branch of the bank from which you will receive interest income. Although, TDS is deducted when total interest earned from all branches exceeds Rs 10,000 in total.

Form15G/Form15H is only a declaration that no TDS should be deducted on your interest income since tax on your total income is nil. Interest income from fixed deposits, recurring deposits, and corporate bonds is always taxable.

Interest income from fixed deposits and recurring deposits is taxable. You should submit this form only if tax on your total income is zero (and you meet other conditions listed above).

You must intimate to your bank that tax on your total income is not zero. The bank will make changes and deduct TDS. You should report the entire interest income in your tax return and pay tax on it as applicable.

These forms don’t have to be submitted to the income tax department by you. When you submit them to the deductor, he/she will prepare and submit to the income tax department, a detail of all such forms received.

Form 15G should not be submitted if your income has to clubbed with someone else. Interest income from money invested in a 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 cannot be submitted. PAN of the depositor should be provided and TDS should be deducted in the name of the depositor.

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