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.10,000 in a year. 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.
In this article, we cover the following
Form 15G and Form 15H are forms you can submit to prevent TDS deduction on your income, if you meet the conditions mentioned below. For this, PAN is compulsory. Some banks allow you to submit these forms 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, please submit these forms every year at the beginning of the financial year. This will ensure the bank does not deduct any TDS on your interest income.
| Person / Category | Neha | Deepak | Swathi | Rahul |
|---|---|---|---|---|
| Age | 50 years | 21 years | 65 years | 68 years |
| Salary | Rs. 1,80,000 | – | – | – |
| Pension | – | – | 1,00,000 | – |
| Fixed Deposit interest income | Rs. 85,000 | Rs. 2,60,000 | Rs. 1,80,000 | Rs. 3,30,000 |
| Total Income before allowing section 80 Deductions | 2,65,000 | 2,60,000 | 2,80,000 | 3,30,000 |
| Deductions under section 80 | Rs. 45,000 | Rs. 30,000 | Rs. 10,000 | Rs. 55,000 |
| Taxable income | Rs. 2,20,000 | Rs. 2,30,000 | Rs. 2,70,000 | Rs. 2,75,000 |
| Minimum exempt income | Rs. 2,50,000 | Rs. 2,50,000 | Rs. 3,00,000 | Rs. 3,00,000 |
| Eligible to submit Form 15G | Yes | No | No | No |
| Eligible to submit Form 15H | No | No | Yes | Yes |
| Explanation | Form 15G can be submitted as age is less than 60 years. Total tax is nil and interest income is less than minimum exempt income. | Form 15G cannot be submitted since interest income is more than the basic exemption limit | Form 15H can be submitted if age is more than 60 years and tax calculated on total income is nil. | Form 15H can be submitted as age is more than 60 years and tax calculated on total income is nil. Form 15H can be submitted although interest income exceeds basic exemption limit. |
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.
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
Most banks deduct TDS every quarter. If you forgot 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
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.
HUF can submit Form 15G if it meets the conditions but Form 15H is only for individuals. To find more about taxes for HUF read our guide on HUF taxation here.
NRIs cannot submit Form 15G or Form 15H. These can only be submitted by resident Indians.
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.
Form 15G/Form 15H 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. 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.
6. 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.
7. Do I have to submit this form 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.
If you are a TDS deductor, the Income-tax Act requires you to allot a Unique Identification Number or UIN to everyone who submits a Form 15G/Form15H. You must file a statement of Form 15G/Form15H on a quarterly basis and must retain these forms for 7 years.
(b) If yes, latest assessment year for which assessed – mention the latest year in which your income was above taxable limit
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.
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