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Forms 15G & 15H: What can you do to make sure the 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 for individuals other than senior citizens (for senior citizens , the limit is Rs. 50,000) under section 194A of the Income Tax Act.The bank adds deposits held in all its branches to calculate this limit.
However, 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.
CBDT has extended the due date for filing Form 15G/ 15H from 31st March 2021 to 30th June 2021 for FY 2020-21
CBDT issued a circular on 25th June 21 extending some timelines for AY 21-22
(i) The due date to file TDS return for Q4 of the FY 2020-21 is extended from 30th June 21 to 15th July 21.
(ii) The due date to furnish the TDS Certificate to employees in Form No. 16 is extended from 15th July 21 to 31st July 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.
|FORM 15G||FORM 15H|
|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.|
|Age||50 years||21 years||65 years||68 years|
|FD interest income||Rs. 85,000||Rs. 2,60,000||Rs. 1,80,000||Rs. 3,30,000|
|Total Income before allowing section 80 Deductions||Rs. 2,65,000||Rs. 2,60,000||Rs. 2,80,000||Rs. 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|
|Age less than 60 year||Yes||Yes||No||No|
|Age more than 60 year||No||No||Yes||Yes|
|Tax on total income is Nil||Yes||Yes||Yes||Yes|
|Interest income is less than basic exemption limit||Yes||No||N.A.||N.A.|
|Form to be submitted||Form 15G||Cannot Submit||Form 15H||Form 15H|
Important points for understanding above example-
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 second wave of COVID-19, the government has extended the validity of Form 15G and Form 15H up to 30th June 2021 from 31st March 2021.
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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.
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 , 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.
In case of failure to submit PAN details of the deductee to the LIC companies, TDS to be deducted at the rate of 20%.
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.
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.
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.
Click here to go to link for ‘Fillable Form 15G/ 15H
Form 15G is required to be submitted as a self-declaration by the individuals who are below the age of 60 years that their income is below the taxable threshold and so no TDS should be deducted for the income credited to their account
Follow below mentioned steps:
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 in the requisite details, and verify the last 4 digits of the phone number, EPF withdrawal form will be visible.
On the screen, you will be able to upload form 15G. You will be able to download Form 15G from here. Fill the Part 1 of the form and convert it into PDF. Upload the PDF copy of the form while making an online claim.
Form 15g can be submitted at below mentioned places for non deduction of TDS
Please log on to the internet banking portal of your bank, you can download form 15H from here. Fill in the details of the form and upload the same on internet banking.
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.
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 the tax on your total income is zero along with other conditions.
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.
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.