Are you tired of paying hefty taxes on your fixed deposits, recurring deposits, and other sources of income? Are you looking for a way to reduce your tax liability legally? Or have you ever faced a situation where your total income for the year is below the taxable limit, yet TDS is deducted from your interest income? If yes, well look no further than Form 15G and Form 15H! These two forms can help you save a significant amount of money on taxes. But, what are these forms, and how do they work?
Let's demystify these two significant tax-saving forms by providing comprehensive information on their definition, eligibility criteria, accurate completion procedures, and submission channels. So, whether you're a beginner or a seasoned taxpayer, you can rely on our guidance to navigate through the process seamlessly.
What Is Form 15G and Form 15H Used for?
While both Form 15G and Form 15H are declarations that can be submitted by an individual to their bank for not deducting TDS on interest earned from fixed deposits, there are key differences between the two forms that must be taken into account before making a decision.
Form 15G is for individuals who earn interest from fixed deposits up to ₹10,000 in a financial year and whose total income does not exceed the basic exemption limit. On the other hand, Form 15H is for senior citizens who earn interest from fixed deposits up to ₹50,000 in a financial year.
What are the Benefits of Submitting Form 15G or 15H?
When it comes to fixed deposits, most people do not know that they need to submit Form 15G or 15H as per their age and tax slab. However, it is essential for you to know some of the key benefits of 15G and 15H. These include:
- Avoiding TDS: One of the main benefits of submitting Form 15G or 15H is that it helps avoid TDS (tax deduction at source). If you do not submit these forms, your bank will deduct TDS from your interest earnings. This can eat into your returns, especially if you are in a lower tax bracket. By submitting these forms, you can ensure that no TDS is deducted from your interest earnings.
- Higher Returns: Another benefit of submitting Form 15G or 15H is that it can help you earn higher returns on fixed deposit schemes. This is because when banks deduct TDS, they usually do so at a higher rate than the actual rate applicable to your account. So, avoiding TDS through these forms effectively earns higher interest on your deposit.
- Flexibility: Another significant advantage of avoiding TDS on your fixed deposit is that it gives you more flexibility in withdrawing your money before maturity. If TDS has been deducted from your account, you will need to pay income tax on the amount withdrawn (including the principal amount).
Who Can Submit Form 15G or 15H?
Individuals who have earned interest on a fixed deposit can submit Form 15G or 15H to their bank to claim exemption from TDS. However, some conditions must be met for an individual to be eligible for these forms.
To submit Form 15G, the following conditions must be met:
* The applicant must reside in India.
* The interest earned on the fixed deposit must be less than ₹10,000 in a financial year.
* The individual's total taxable income must not exceed the basic exemption limit for that financial year.
* The form must be submitted before the due date for filing an income tax return for that financial year.
To submit Form 15H, the following conditions must be met:
* The applicant must be over the age of 60 years.
* The interest earned on the fixed deposit must be less than ₹50,000 in a financial year.
* The form must be submitted before the due date for filing an income tax return for that financial year.
When to Submit Form 15G or 15H?
It is advisable to submit Form 15G or 15H if your income is below the taxable limit and you want to avoid TDS being deducted from your interest income. You can submit Form 15G or Form 15H before the beginning of the financial year or when making the first deposit for that financial year. If you are a senior citizen, you can submit Form 15H even if your income is above the taxable limit so that TDS is not deducted from your interest income.
Where Can You Submit Form 15G or Form 15H Apart from Banks?
If you have a fixed deposit account with a bank or financial institution you can submit Form 15G or Form 15H to the bank. This will enable the bank to deduct TDS from your interest income at a lower rate. Apart from banks, here is the list of entities that you can use to submit Forms 15G and 15H:
- Paying agent of a specified company
- Mutual fund house where you have invested in schemes that are taxable
- Nidhi company
- NBFCs where you have made deposits
- The Reserve Bank of India (RBI)
- Depositories in case of investments in shares, debentures, etc.
- DFIs registered with the RBI
- Co-operative banks registered under the Banking Regulation Act of 1949
How to Fill Form 15G and 15H?
Forms 15G and 15H, as applicable, require you to fill out several entries and details. To better understand how to complete the various fields on these forms, please refer to the points listed below. Fill out each field carefully to ensure that Form 15G or 15H can be submitted successfully online or offline.
Declarant or Assessee's name:
Please enter your name exactly as it appears on your PAN card and tax records.
Status:
Indicate your status, specifying whether you are a Hindu Undivided Family or an individual.
Previous Year:
Indicate which fiscal year you are submitting the form for.
Status as a Resident:
Only people who are residents may submit the form.
Address:
Include your full postal address, PIN code, contact information and email address.
Whether Subject to Taxation Under the Income Tax Act of 1961:
In this section, you should indicate if your income in the previous 6 fiscal years exceeded the taxable threshold.
If Yes, the Latest Assessment Year for Which Assessed:
Mention the most recent fiscal year for which you made tax payments.
Income Assumed in Connection with the Declaration:
Mention the entire amount of all sources of income for which you are claiming a TDS exemption.
Details Required for Form 15G and 15H
Form 15G and Form 15H do not require additional documents for filing. However, linking your PAN Card details is advisable while opening an FD. Additionally, you will need to submit the following information:
- Contact Number
- Residential Address
- Occupation Details
- Email ID
- Brief details about the income sources
If you are looking to get the maximum value from fixed deposits, you can invest in FD from financial institutions like Shriram Fixed Deposit. It yields higher returns on your investment and allows you to leverage both 15H and 15G as per the matching criteria to help you save more on your taxes on returns. Shriram Finance also provides an additional 0.50%* p.a. for senior citizens, make sure to calculate your returns and choose your interest wisely.
Also read: 3 Risk-free Tax-saving Investment Plans for Senior Citizens
To declare your 15G/H form for the existing investment with Shriram Finance, please log in to our Customer portal.
FAQs
- What are the number of copies required to submit forms 15G and 15H?
Banks may require 2-3 duplicate copies of the declaration and acknowledgement.
- How to claim tax refunds under Form 15G and Form 15H for FD?
If you file Form 15G, you must have received the refund of income tax paid for the year in which you filed your return. If you have not filed yet, you can still make a claim for these refunds by filing income tax refunds at the end of the financial year.
- Is there a specific time to file my 15G or 15H form for FDs?
Yes, Forms 15G or 15H must be filed within 1 year of the date on which you received the notice from the FD.
- Is it mandatory to provide my PAN card details to file Forms 15H and 15G?
It is not mandatory to provide PAN card details for filing Forms 15H or 15G. However, it is advisable to provide the PAN number in order to streamline the process and ensure that the same is reflected on your income tax return.
Key Highlights
- If you invest more than ₹50,000 in fixed deposits, two sections of the Income Tax Act can provide additional benefits - Sections 15G and 15H.
- Form 15G is for individuals who earn interest from fixed deposits up to ₹50,000 in a financial year and whose total income does not exceed the basic exemption limit.
- Form 15H is for senior citizens who earn interest from fixed deposits up to ₹50,000 in a financial year and whose total income does not exceed the basic exemption limit plus the additional deduction of ₹50,000 available to senior citizens.
- Form 15G and Form 15H are documents that can be submitted by an individual to a bank or any other monetary institution to avoid deduction of taxes at source on interest income earned by them.
- If you have a fixed deposit account with a bank, you can submit Form 15G or Form 15H to the bank. This will enable the bank to deduct TDS from your interest income at a lower rate.
