Budget 2021 update :It has been proposed to exempt the senior citizens from filing income tax returns if pension income and interest income are their only annual income source. Section 194P has been newly inserted to enforce the banks to deduct tax on senior citizens more than 75 years of age who have a pension and interest income from the bank.
Introduction to Form 15G and 15H:
Forms 15G & 15H :What can you do to make sure bank does not deduct TDS on interest, if your total income is not taxable? Banks have to deduct TDS when your interest income is more than Rs.40,000 in a year (prior to FY 2019-20, the limit was Rs 10,000). The bank adds 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.
Form 15G and 15H submitted for FY 2019-20 will be valid up to 30 June 2020 (First Quarter of FY 2020-21).
Form 15G and Form 15H are self declaration forms that an individual submits to the bank requesting not to deduct TDS on interest income as their income is below the basic exemption limit. For this, providing PAN is compulsory. Some banks allow you to submit these forms online through the bank’s website.
2. Who can submit form 15G and 15H?
Form 15H is specifically for senior citizens, those who are 60 years or older, while Form 15G is for everybody else.
Resident Individual or HUF or trust or any other assessee but not a company or a firm with age less than 60 years
Resident Individual with an age 60 years or more i.e Senior citizen.
Tax calculated on your total income is Nil
Tax calculated on your Total Income is Nil
The total interest income subject for the year is less than the basic exemption limit of that year, which is Rs.2.5 lakh for financial year 2020-21 (AY 2021-22)
Please note that benefits of Form 15G and 15H cannot be claimed by Non residents.
Example to understand who can submit Form 15G and form 15H
FD interest income
Total Income before allowing section 80 Deductions
Deductions under section 80
Minimum exempt income
Eligible to submit Form 15G
Eligible to submit Form 15H
Age less than 60 year
Age more than 60 year
Tax on total income is Nil
Interest income is less than basic exemption limit
Form to be submitted
In above example-
Deepak cannot submit Form 15G even though Tax on total income is Nil, because his interest income is more than the basic exemption limit.
Rahul, who is a senior citizen can submit form 15H as his tax liability is Nil.
Condition of interest income being more than basic exemption limit is applicable for form 15G only and not for form 15H.
3. When should you submit Form 15G and Form 15H?
Form 15G and Form 15H are valid for one financial year. So, please submit these forms every year at the beginning of the financial year. This will ensure that the bank does not deduct any TDS on your interest income. For FY 2020-21, in view of the spread of the disease COVID-19, taxpayers may not be able to submit the forms in the first week of April 2020. Hence, the government had extended the validity of the Form 15G and Form 15H up to 30th June 2020 from 31st March 2020. Taxpayers can submit the Form 15G and Form 15H in the first week of July 2020. For the period beginning 1st April 2020 and up to 30th June 2020, the Form 15G and 15H submitted for FY 2019-20 will be considered as a valid proof for non-deduction of TDS.
Check your total tax payable with the help of our Calculator
4. Forgot to submit Form 15G or Form 15H?
A lot of taxpayers forget to submit Form 15G and Form 15H on time. In such a situation, the bank might have already deducted the TDS. Based on your situation, you can do any of the following.
a. File your income tax return to claim refund of TDS
The only way to seek 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.
b. Submit Form 15G and Form 15H immediately
Most banks deduct TDS every quarter. If you forget to submit Form 15G or Form 15H, don’t worry. Submit it at the earliest so that no TDS is deducted for the remaining financial year. To claim refund of excess TDS deducted, start filing your return on ClearTax
5. Where can you submit Form 15G or Form 15H apart from banks?
While these forms can be submitted to banks to make sure TDS is not deducted on interest, there are a few other places too where you can submit them.
TDS on EPF withdrawal –TDS is deducted on EPF balance 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 June 2016, Rs.30,000 prior to that), you can submit Form 15G or Form15H. However, you must fulfil conditions (listed above) to apply for these forms. It means the tax on your total income including EPF balance 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 or Form 15H to the issuer requesting non-deduction of TDS.
LIC premium receipts –With effect from October 2014, if the amount received from a policy exceeds Rs 1 lakh and it is taxable, 2% TDS shall be deducted by the insurer before paying. From 1st September 2019, TDS is 5% on the amount of income comprising the proceeds paid or payable upon maturity. You can submit Form 15G/Form 15H to request that no TDS be deducted since tax on your total income is nil.
TDS on post office deposits –Post offices that are digitised also deduct TDS and accept Form 15G or Form 15H, if you meet the conditions applicable for submitting them.
TDS on rent – TDS is deducted on rent exceeding Rs 2.4 lakh annually. If tax on your total income is nil, you can submit Form 15G or Form 15H to request the tenant to not deduct TDS (applicable from 1 April 2019).
TDS on Insurance Commission – TDS is deducted on insurance commission, if it exceeds Rs 15000 per financial year. However, insurance agents can submit Form 15G/Form 15H for non deduction of TDS if tax on their total income is nil (with effect from 1 June 2017).
6. Important Information for Deductors
If you are a TDS deductor, the Income-tax Act requires you to allot a Unique Identification Number or UIN to everyone who submits the Form 15G/Form 15H. You must file a statement of Form 15G/Form 15H on a quarterly basis and must retain these forms for 7 years.
7. How to fill Form 15G?
Name of Assesse (Declarant) – Enter your name as per income tax records & PAN number as per your PAN card,
Status – Input Whether you are an individual or HUF
Previous Year –Input current financial year for which you are filing up the form
Residential Status – this form can only be filled by Residents. Check your residential status here
Fill Address details along with PIN code, email and telephone number.
whether assessed to tax under the income tax act, 1961? – If your income was above taxable limit in any of the past 6 years, answer this question with ‘yes”.
If yes, the latest assessment year for which assessed – mention the latest year in which your income was above the taxable limit.
Estimated income for which declaration is made – fill sum of interest or other income on which TDS should not be deducted.
Estimated total income of the previous year in which income mentioned in column 16 to be included – Calculate your total income from all sources, salary, stipend, interest income, any other income that you have earned during the year. Include the income mentioned in 16, above
Details of Form 15G other than this form filed during the previous year, if any;- please mention the total number of Form 15G filed for that particular year.
Also fill aggregate amount of income for which form 15G filed – Also provide the total income for which Form 15G was filed
Fill Details of income for which declaration is filed; Identification number of relevant investment/account etc, Nature of Income, Section under which tax is deductible, Amount of income – Provide fixed deposit account number, recurring deposit details, details of NSCs, life insurance policy number etc. (many of these are chargeable to tax under section 56 of the income tax act)
Signatures – mention your capacity when signing on behalf of an HUF or AOP
Do not submit the form if such income has to be Clubbed with the income of another person
Do not submit Form 15G, if your income has to clubbed with someone else. Interest income from an 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 is not valid. PAN of the depositor is mandatory and TDS should be deducted in the name of the depositor.
Account holder to login internet banking www.onlinesbi.com. Under “e-services” select > Submit form 15G/H option as applicable to you.Select 15G if you are below 60 years and 15H if above 60 years. Select the CIF number and click on submit. This will open a pre-filled form with some of your details, please fill the missing details. Click on generate OTP and authenticate by inputting OTP received on your registered mobile number.
What is Form 15G used for? Why is form 15G required?
Form 15G is required to be submitted as a self declaration by the individuals that their income is below the taxable threshold and so no TDS should be deducted for the income credited to their account
How to fill Form 15G for PF withdrawal?
EPFO portal has launched online submission of form 15G while submitting EPF withdrawal claim online. However you can also fill and submit a physical copy to EPFO regional office for non-deduction of TDS. For online submission, login to EPFO UAN unified portal, Click on Online services > Online Claim, fill the requisite details and verify last 4 digits of phone number, EPF withdrawal form will be visible. In the screen you will be able to upload form 15G. You will be able to download the Form 15G from here. Fill the Part 1 of the form and convert into PDF . Upload the PDF copy of the form while making an online claim.
Where to submit form 15g?
Form 15g can be submitted at below mentioned places for non deduction of TDS
EPFO at the time of premature withdrawal of PF.
Corporate bond issuing companies
To Insurance companies by insurance agents
Post office for deposits.
How to submit form 15H online?
Please log on to the internet banking portal of your bank, you can download form 15H from here. Fill the details of the form and upload the same on internet banking.
Do I need to submit Form 15G/ Form 15H at all the branches of the bank?
Yes, you must submit one at each branch of the bank from which you receive interest income though TDS is deducted only when total interest earned from all branches exceeds Rs 10,000.
Will my interest income become tax free if I submit Form 15G/Form 15H?
Interest income from fixed deposits and recurring deposits is taxable. For senior citizens deduction of Rs.50,000 is available under section 80TTB for the interest income from fixed deposits/post office deposits/deposits held in co-operative society. You should submit this form only if tax on your total income is zero along with other conditions.
I submitted Form 15G and Form 15H but I have taxable income?
You must intimate to your bank that tax on your total income is not zero. The bank will make changes and deduct TDS accordingly. Do report the entire interest income in your tax return and pay tax on it as applicable.
Do I have to submit form 15G/H to the income tax department?
You don’t need to submit these forms directly to the income tax department. Just submit them to the deductor, and they will prepare and submit these forms to the income tax department.