Form 15H and 15G to save TDS on Interest Income
Form 15H aims to enable individuals claim relief from TDS deductions on income generated from interest on Fixed Deposits in Banks made during a specific financial year provided the individuals meet certain eligibility criteria. Individuals must have a PAN card for being to claim TDS relief. These forms can be submitted at banks or digitalised post offices. Certain banks offer the benefit of online submission of Form 15H through their official websites.
Form 15H is solely for senior citizens, that is, individuals who are at least 60 years of age. Since these forms are valid for only one financial year, eligible individuals wanting to claim TDS deductions on investment interest have to submit it on every financial year. To prevent the bank from deducting TDS on interest income, Form 15H has to be submitted at the start of a new financial year. You can download the 15G and 15H forms on the Income Tax portal.
Nature of Deposits
The frequency of interest i.e. monthly, half-yearly or cumulative payments will not impact the incidence of TDS. “The moment TDS accrues in the case of cumulative deposits or gets credited to the savings account of the taxpayer in the case of half yearly deposits, TDS is deducted by the bank provided the interest paid exceeds Rs 10,00 across all branches in aggregate during an FY.
Conditions you must fulfill to submit Form 15G
- You are an individual or HUF or trust or any other assessee but not a company or a firm
- You must be a Resident Indian
- You should be less than 60 years old
- The total interest income for the year is less than the basic exemption limit of that year, which is Rs 2,50,000.
Conditions you must fulfill to submit Form 15H
- You are an individual
- You must be a Resident Indian
- You are 60 years old or will be 60 years old during the year for which you are submitting the form
- The total interest income for the year is less than the basic exemption limit of that year, which is Rs 2,50,000. .
Purposes for which Form 15G or Form 15H can be submitted
While these forms can be submitted to banks to make sure TDS is not deducted on interest, there a few other places too where you can submit them.
1. TDS on Fixed Deposits
Form 15G/H helps customers to avail exemption from TDS on interest earned on fixed deposits and recurring deposits in a financial year. The following are the conditions from banks to claim Form 15G.
Form 15G to be submitted by an individual who is less than 60 years of age at any time during the financial year, Trust, Association, Club and HUF.
Form 15G/H can be accepted only if the Estimated Total Income including the estimated income earned on deposit(s) is less than or equal to the basic exemption limit as specified, for the respective financial year.
- As per Finance Act 2009, w.e.f. April 1, 2010 Form 15G/H shall not be treated as valid unless a valid PAN is furnished.
- During every Financial Year (FY), a fresh Form 15G/H needs to be submitted.
- Fresh form needs to be submitted for new deposits opened.
- Form 15G/H does not include closed fixed deposits and closed recurring deposits as on the date of filling the form.
- The basic exemption limit for the financial year in which form 15G/H is submitted is mentioned below:
- Up to Rs. 2,50,000 for individuals below the age of 60 years, Trust, Association, Club and HUF (being resident of India)
- Up to Rs. 3,00,000 for senior citizen residents of India who are between the age of 60-79 years at any time during the FY
- Up to Rs. 5,00,000 for senior citizen residents of India who are 80 years or more at any time during the FY
2. TDS on EPF Withdrawal
TDS is deducted on EPF balances if withdrawn before 5 years of continuous service. If you have had less than 5 years of service and plan to withdraw your EPF balance of more than Rs 50,000 (Rs 50,000 effective 1 st June 2016, Rs 30,000 prior to that), you can submit Form 15G/Form15H. However, you must fulfil conditions (listed above) to apply for these forms, i.e. tax on your total income including EPF balance withdrawn should be nil.
3. 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/Form15H to the issuer requesting non-deduction of TDS.
4. TDS on Post Office Deposits
Post offices which are digitised also deduct TDS and accept Form 15G/Form15H if you meet the conditions applicable for submitting them.
5. TDS on Rent
TDS is deducted on rent if total rental payment in a year exceeds Rs 2.4 lakhs. If tax on your total income is nil, you can submit Form 15G/Form15H to request the tenant to not deduct TDS. (Applicable from 1 st June 2016)
6. TDS on Insurance Commission
TDS is deducted on insurance commission if it exceeds Rs 15000 per financial year. But with effect from 01.06.2017 insurance agents can submit Form 15G/form 15H for non-deduction of TDS if tax on their total income is nil.
The institution will deduct tax at source only when the interest income exceeds a certain limit. If your interest income exceeds Rs 40,000 in a year, the bank will deduct 10 percent as TDS on the entire interest amount. At times, there could be more than one deposit in different branches of the same bank. In such cases, the interest amount is to be added up for TDS purpose. The TDS limit for interest income earned in company deposits is Rs 5,000.
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