Form 15G & Form 15H to Save TDS on Interest Income
If your interest from FD is below the tax exemption threshold of ₹5 lakh, your tax liability will be zero and by filing Form 15G with your bank, you will be exempt from TDS with respect to your interest income
What is Form 15G and Form 15H?
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.
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.
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.
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.
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.
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TDS is deducted on EPF balance if withdrawn before 5 years of continuous service.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 , 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.
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