Form 15G and Form 15H

Form 15G and Form 15H

Form 15G and Form 15H let eligible taxpayers instruct their bank — or any other deductor — not to cut TDS on interest income before it reaches their account. Filed correctly at the start of the financial year, they keep your cash flow intact and eliminate the need to chase refunds. Filed carelessly, they can trigger a penalty or prosecution under the Income-tax Act 1961. With the new tax regime now the default for FY 2026-27 and higher exemption thresholds reshaping eligibility, it is worth understanding exactly when you qualify, how to file, and where taxpayers routinely go wrong.

What Are Form 15G and Form 15H — Legal Basis and Purpose

Both forms are self-declarations submitted under Section 197A of the Income-tax Act 1961. When a deductor — a bank, NBFC, post office, or employer (for EPF) — receives a valid declaration, it is legally obligated to release your income without deducting TDS, provided you meet the eligibility conditions.

• Form 15G is for resident individuals below 60 years of age and Hindu Undivided Families (HUFs).
• Form 15H is for resident senior citizens — individuals who are 60 years of age or older at any time during the financial year.

These are not optional disclosures. Once submitted and accepted, the deductor cannot deduct TDS on the covered income for that financial year. The declaration is valid for one financial year only and must be renewed every April.

Each form has two parts: Part I is filled by you (the declarant); Part II is filled by the deductor after acknowledging receipt and will be reported to the Central Board of Direct Taxes (CBDT) on a quarterly basis. This quarterly reporting is what makes a false or casual declaration risky — CBDT's systems can flag declared income against your Annual Information Statement (AIS) and Taxpayer Information Summary (TIS).

Eligibility — The Two Tests You Must Pass

Form 15G: The Dual Condition (Non-Senior Citizens and HUFs)

Section 197A(1A) imposes two independent conditions, both of which must be satisfied simultaneously:

1. Tax on estimated total income for FY 2026-27 is NIL — This means your total income from all sources (salary, interest, rental, capital gains, business, etc.) for the full financial year, after applicable deductions under the chosen tax regime, results in zero tax liability.

1. The aggregate income of the type covered by the declaration does not exceed the basic exemption limit — For FY 2026-27, under the new tax regime, the basic exemption is as notified under the Finance Act 2026 (Rs. 4,00,000 was the limit for FY 2025-26; verify the current year's figure before filing). Under the old regime, the limit is Rs. 2,50,000 for individuals below 60.

Both conditions must be met. Meeting only one is not sufficient. A taxpayer whose total interest income is Rs. 1,20,000 but has salary income that pushes total tax above NIL cannot file Form 15G even if the interest alone is well within the exemption limit.

Form 15H: The Single Condition (Senior Citizens Aged 60+)

Section 197A(1C) imposes only one condition on senior citizens:

• Tax on estimated total income for FY 2026-27 is NIL.

There is no upper cap on the specific income type being declared. A senior citizen with Rs. 2,50,000 in FD interest can file Form 15H as long as total tax on all income for the year computes to zero — regardless of whether that interest income exceeds the basic exemption limit. This is a significant and often misunderstood advantage for senior citizens.

Common misreading: Many senior citizens assume they cannot file Form 15H if their FD interest alone exceeds Rs. 50,000. That is wrong. The test is total tax liability, not the quantum of the specific income being declared.

Conditions Applicable to Both Forms

• The declarant must be a resident of India. Non-Resident Indians (NRIs) cannot submit either form.
• PAN is mandatory. Without PAN, TDS is deducted at 20% under Section 206AA, and no declaration can prevent it.
• The declaration cannot be filed retroactively. Once TDS is deducted, these forms cannot reverse it.
• Separate declarations must be filed with every deductor from whom you receive covered income.

Income Types Where These Forms Apply

Section 197A applies across several income streams. The most common are:

• Interest on fixed deposits and recurring deposits — from banks (Section 194A), cooperative societies, and post offices
• Interest on corporate deposits and bonds — Section 193 (interest on securities) and Section 194A
• EPF withdrawals before completing 5 years of continuous service — Section 192A, where withdrawal exceeds Rs. 50,000 and Form 15G can prevent 10% TDS
• Interest income from NSC, KVP, and post office savings — where applicable
• Insurance commission — Section 194D (Form 15G only)
• Income from units of mutual funds — Section 194K, in specified circumstances

It does not apply to salary, capital gains (which have their own TDS provisions), or dividends (Section 194 has separate rules).

How to File Form 15G or 15H in FY 2026-27 — Step by Step

1. Estimate total income for FY 2026-27 — Include all sources: salary or pension, all interest income (across every bank and institution), rental income, capital gains, and any other receipts. Do not leave out the interest from dormant FDs or laddered deposits.

1. Calculate estimated tax under your chosen regime — Run the numbers under both regimes if you have not yet opted. If tax under either regime is NIL, you may qualify. Remember that under the new regime, deductions under Chapter VIA (80C, 80D, etc.) do not apply, so your taxable income may differ between regimes.

1. Confirm both conditions for Form 15G, or the single condition for Form 15H.

1. Log into your bank's net banking portal — Most major banks (SBI, HDFC, ICICI, Axis, Bank of Baroda, etc.) now allow online submission of Form 15G/15H through internet banking under the "Tax" or "Service Requests" section. You can also submit physically at the branch in two copies; the branch retains one and returns an acknowledgement copy.

1. File a separate declaration with every deductor — If you have FDs with three different banks plus a post office RD, that is four separate submissions.

1. Declare aggregate income from all 15G/15H filings during the year — The form asks you to disclose the total number of Form 15G/15H already filed in the current year and the aggregate income covered by those earlier declarations. This cross-disclosure is how CBDT cross-checks consistency.

1. File in April, not March — Declarations are valid from the date of submission for the financial year. If you wait until June, the April–June quarter's interest may already have TDS deducted.

1. Save the acknowledgement — Store a digital copy of every acknowledgement. You will need it if a deductor erroneously deducts TDS or if the AO questions the filing.

Worked Example: Calculating Before You Declare

Scenario A — Homemaker with FDs Across Two Banks (Form 15G)

Sunita, 44, is a homemaker with no salary income. She holds:

• FDs at HDFC Bank: interest credited this year = Rs. 82,000
• FDs at SBI: interest credited this year = Rs. 36,000
• No other income

Total estimated income FY 2026-27: Rs. 1,18,000

Tax calculation (new regime): Rs. 1,18,000 is well below the basic exemption — tax = NIL.

Form 15G conditions for HDFC Bank:

• Condition 1 (tax = NIL): ✓
• Condition 2 (interest ≤ basic exemption): Rs. 1,18,000 total interest < basic exemption ✓

Result: Sunita files Form 15G with both banks. Without it, HDFC Bank would deduct TDS at 10% on Rs. 82,000 (which exceeds the Rs. 40,000 threshold under Section 194A) = Rs. 8,200 deducted. SBI's Rs. 36,000 is below the threshold so no TDS there. By filing, she retains Rs. 8,200 in cash that year rather than waiting months for an ITR refund.

Scenario B — Retired Senior Citizen (Form 15H)

Ramesh, 67, is a retired government employee with:

• Monthly pension: Rs. 20,000 × 12 = Rs. 2,40,000/year
• FD interest from Bank of Baroda: Rs. 1,80,000/year
• Total income: Rs. 4,20,000

Under the new regime for FY 2026-27 (using FY 2025-26 slabs as reference), tax on Rs. 4,20,000:

• Up to Rs. 4,00,000: NIL
• Rs. 20,000 at 5% = Rs. 1,000 + 4% cess = Rs. 1,040

Tax is not NIL; Ramesh cannot file Form 15H.

Now assume pension is Rs. 16,000/month = Rs. 1,92,000/year and FD interest is Rs. 1,80,000/year:

• Total: Rs. 3,72,000 → Tax = NIL (below Rs. 4,00,000 exemption)
• Form 15H: ✓ eligible
• TDS saved on Rs. 1,80,000 at 10% = Rs. 18,000 kept in hand each year

Scenario C — EPF Withdrawal (Form 15G)

Aakash, 32, resigns after 4.5 years of service and withdraws his EPF balance of Rs. 3,50,000. His salary income from April to resignation is Rs. 1,60,000. He has no other income; total income for FY 2026-27 will be Rs. 5,10,000 (salary + EPF withdrawal).

Tax on Rs. 5,10,000 under new regime = 5% on Rs. 1,10,000 = Rs. 5,500 + cess = Rs. 5,720. Tax is not NIL. Aakash cannot file Form 15G. TDS at 10% under Section 192A applies: Rs. 35,000 deducted on the EPF withdrawal. He can claim this as credit when filing his ITR for AY 2027-28.

Common Mistakes and Pitfalls to Avoid

1. Forgetting to include all income sources when estimating. The most common error. A taxpayer includes only FD interest and ignores freelance income, rental receipts, or capital gains from equity mutual fund redemptions. This leads to an underestimate of total income, a false declaration, and potential prosecution.

2. Filing Form 15G despite income exceeding the basic exemption limit. Even if tax works out to NIL because of deductions (under old regime), Form 15G requires that the aggregate income being declared does not exceed the basic exemption limit. A person with Rs. 5,00,000 in FD interest who has tax = NIL due to 80C deductions cannot file Form 15G — their interest income exceeds the basic exemption. They must instead apply for a lower deduction certificate under Section 197 (Form 13) through the income-tax portal at incometax.gov.in.

3. Using Form 15G when Form 15H is the correct form. A taxpayer who turned 60 in November of the previous financial year and is now 60+ must use Form 15H in FY 2026-27, not Form 15G.

4. Not filing at every deductor. One declaration at your primary bank does not cover FDs at a cooperative society, an NBFC, or a second bank. TDS will still be deducted at every deductor where no declaration is on file.

5. Filing in March instead of April. The forms are effective only from the date of submission. If filed in March for the outgoing year, they do nothing for the new year. File fresh declarations each April.

6. Not disclosing previously filed declarations. The form explicitly asks: "Details of Form 15G/15H filed with other deductors during the current financial year." Leaving this blank or under-reporting is treated as a discrepancy when CBDT reconciles data.

7. Failing to renew when income circumstances change. An FD that matured and was reinvested at a higher rate, or a new FD opened mid-year, may push interest income above your earlier estimate. If the new total makes you ineligible, stop filing and inform your bank to resume TDS.

The False Declaration Trap — Section 277A and Its Consequences

If you submit Form 15G or Form 15H knowing that you do not meet the eligibility conditions, you are furnishing a false declaration under Section 197A. This is a criminal offence under Section 277A of the Income-tax Act 1961, which provides for:

• Imprisonment of not less than 3 months and up to 3 years, plus fine.

The prosecution threshold is where the tax sought to be evaded exceeds Rs. 25 lakh (as amended); below that, compounding is possible. But even below that threshold, the Assessing Officer can levy penalties under Sections 271 and 271C, and the bank or deductor can be held jointly liable for TDS not deducted.

Practically, CBDT's automated reconciliation through AIS and TIS flags mismatches between declared income on 15G/15H and income appearing in AIS. When the AO issues a notice, the burden is on you to show the declaration was made in good faith with a reasonable income estimate. "I did not know" is rarely a defence when PAN-linked data clearly shows higher income.

The practical advice: before signing, compute your income on paper. A few minutes of estimation protects you from a penalty that can run into lakhs.

Form 15G, Form 15H and the New Tax Regime in FY 2026-27

The new regime is now the default. If you have not actively opted for the old regime, the new regime applies to your income computation for FY 2026-27.

Two implications for Form 15G/15H planning:

1. Higher basic exemption, but fewer deductions. Under the new regime, the basic exemption is higher than under the old regime (as notified for FY 2026-27 — verify the current figure; it was Rs. 4,00,000 for FY 2025-26 versus Rs. 2,50,000 under the old regime for non-senior citizens). This means more non-senior-citizen taxpayers may find their total income falls below the basic exemption, making them eligible for Form 15G where they previously were not.

2. Section 87A rebate does not change Form 15G eligibility. Under the new regime, a rebate under Section 87A makes income up to a specified limit (Rs. 12,00,000 for FY 2025-26) effectively tax-free. But Form 15G requires the aggregate income being declared to not exceed the basic exemption limit — not the rebate ceiling. A taxpayer with Rs. 5,00,000 in FD interest has NIL tax due to the rebate but still cannot file Form 15G because Rs. 5,00,000 exceeds the basic exemption. Form 15H for senior citizens has no such restriction — only NIL tax is needed.

3. Old regime still available. If you actively opt for the old regime (via your employer or ITR), the old regime slab rates and exemption limits apply. Under the old regime, Section 80TTB allows senior citizens a deduction of up to Rs. 50,000 on interest income, which can reduce taxable income and bring tax to NIL, enabling Form 15H filing even where new-regime tax would not be NIL.

If TDS Has Already Been Deducted — How to Recover It

If you missed the April window and your bank deducted TDS on Q1 interest, here is what you do:

1. Do not panic. TDS already deducted is reflected as credit in Form 26AS and AIS linked to your PAN.
2. File Form 15G/15H immediately for the remaining quarters of the year. This stops further TDS deductions for Q2, Q3, Q4.
3. File your ITR for AY 2027-28 and claim the TDS credit. If your total tax for the year is NIL, the entire TDS amount appears as a refund.
4. Reconcile Form 26AS, AIS, and TIS after June 15 to verify the deductor has correctly deposited the TDS against your PAN. A mismatch — common when PAN is incorrectly quoted — means the credit will not appear, and you will need to contact the deductor to file a correction.
5. Refund processing timelines: Refunds for straightforwardly filed ITRs with no scrutiny triggers are typically processed within 30–60 days of e-verification of the return.

Key Takeaways

• Form 15G has two mandatory conditions: (i) total tax for the year is NIL, and (ii) the specific income being declared does not exceed the basic exemption limit. Miss either, and you cannot file.
• Form 15H for senior citizens requires only one condition — NIL tax on estimated total income. There is no cap on the specific income declared.
• File in April, not March, and file separately with every deductor — bank, post office, NBFC — from whom you receive covered income.
• The Section 87A rebate does not substitute for Form 15G eligibility. If total income exceeds the basic exemption, Form 15G is off the table even if tax works out to NIL through the rebate.
• Estimate total income honestly — salary, all FD interest, freelance income, rental income, capital gains — before signing. A false declaration exposes you to prosecution under Section 277A.
• The new regime's higher basic exemption makes more non-senior taxpayers eligible for Form 15G in FY 2026-27 than in prior years — check eligibility even if you did not qualify before.
• If TDS is already deducted, file Form 15G/15H for remaining quarters immediately and recover the deducted amount as a refund through your ITR for AY 2027-28 — it is not lost, just delayed.