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Form 15G & 15H: Save TDS on Interest on Deposits whether Fixed or Recurring

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Introduction-

Form 15G and 15H are self-declarations forms filed with the banks or financial institutions who, deduct TDS on the interest income earned/accrued to not deduct TDS on the interest income from Fixed Deposits/Recurring Deposits.

  • Form No. 15G: For Resident Individuals below the age of 60 Years (Other than Senior Citizens)
  • Form No. 15H:   For Resident Senior Citizens with the age of 60 years or above
 

As per section 194A of the Income Tax Act 1961, every Banks or Financial Institutions have to deduct TDS on Interest if the amount of interest exceeds Rs. 10,000 40,000 per annum w.e.f. 01.04.2019, as amended in Budget 2019. As earlier in Budget 2018 the limit of Rs. 10,000 has increased to Rs. 50,000 for Senior Citizens only. Form 15G or 15H is a self declaration signed by the customer, for not deduct TDS on the interest income.


See the related post : How to E-file Income Tax Return
 
Who can submit form No. 15G?
A person, Resident in India below the age of 60 years, to be eligible to furnish Form 15G, if they fulfill the following two conditions:
  1. The tax liability on the basis of his estimated income is nil; and
  2. The aggregate amount of interest income etc. received during the financial year should not exceed the basic exemption limit of Rs. 2,50,000 for the A.Y. 2019-20.
Example-
Particulars Mr. X. Mr. Y Mr. Z
Interest Income 1,00,000 2,00,000 3,00,000
Other Income 1,00,000 80,000 50,000
Total Income 2,00,000 2,80,000 3,50,000
Less: Deductions 50,000 50,000 50,000
Taxable Income 1,50,000 2,30,000 3,00,000
Can Submit Form 15G Yes Yes No
Reasons Fulfill both Conditions Fulfill both conditions Not fulfill both conditions

 
Who can submit form No. 15H?
Any Resident Individual, with the age of 60 years or more, can submit form No. 15H provided his tax liability on the basis of his estimated income is nil. Unlike form No. 15G, this form can be submitted by the Senior Citizens even though the aggregate amount of interest income may exceed Rs. 3,00,000 which is the basic exemption limit for the A.Y 2019-20 and for Super Senior Citizens the basic exemption limit is Rs 5,00,000 for A.Y 2019-20.
Example-
Particulars Mr. X. Mr. Y Mr. Z
Interest Income 1,50,000 2,50,000 3,50,000
Other Income 1,00,000 90,000 1,50,000
Total Income 2,50,000 3,40,000 5,00,000
Less: Deductions 50,000 50,000 50,000
Taxable Income 2,00,000 2,90,000 4,50,000
Can Submit Form 15H Yes Yes No
Reasons Tax liability is Nil Tax liability is Nil Tax liability Due

 
Purposes for which Form 15G or Form 15H can be submitted-
Form 15G & 15H is submitted to banks or financial institutions to make sure that his total income falls below the exemption limit, there are a few other places, where the said form can be submitted-
  • TDS on EPF withdrawal – TDS is deducted on EPF balances if withdrawn before 5 years of continuous service. If you have less than 5 years of service and want to withdraw your EPF, which is more than Rs 50,000, you can submit Form 15G/Form 15H for non deduction of TDS, if tax on your total income including amount of  EPF withdrawn should be nil.
  • TDS on income from Corporate Bonds – If you hold corporate bonds, TDS is deducted on them if your income from them exceeds Rs 5,000. You can submit Form 15G/Form 15H for non deduction of TDS, if tax on your total income is nil.
  • TDS on Post Office Deposits – Post offices which are digitalized also deduct TDS. You can submit Form 15G/Form15H for non deduction of TDS, if tax on your total income is nil.
  • TDS on Rent – TDS is deducted on rent if total amount of rent exceeds Rs 1,80,000 2,40,000 per annum w.e.f. 01.04.2019, as amended in Budget 2019. You can submit Form 15G/Form 15H for non deduction of TDS, if tax on your total income is nil.
  • TDS on Insurance Commission – TDS is deducted on insurance commission if it exceeds Rs 15,000 per financial year then the TDS will be applicable. An insurance agent can submit Form 15G/form 15H for non deduction of TDS, if tax on your total income is nil.
  • LIC Premium Receipt- If the amount received from insurance policy exceeds Rs. 1,00,000 then the TDS will be applicable. You can submit Form 15G/Form 15H for non deduction of TDS, if tax on your total income is nil.
 



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