According to the Income Tax Act, 1961, Income from any source—salary, business, property, capital gain, interest from bank fixed deposit, etc.—is subject to an income tax deduction. In fact, a sum of money is deducted from the income right at the beginning or source, known as TDS (Tax Deducted at Source).
Now, even banks deduct TDS if your interest income is above a particular threshold. However, you can choose not to get the same deducted by submitting Form 15G. So, if you are below 60 years old and the interest income generated from your bank deposits exceeds Rs.40,000, the bank deducts TDS. The limit is Rs 50,000 for senior citizens under section 194A of the Income Tax Act. However, you can request the bank not to deduct TDS from your interest income. Just submit Form 15G to the bank to retain the entire interest. For senior citizens, you need to submit Form 15H.
Via Form 15G, you intimate the bank that you would pay the due taxes at your end so that the bank does not deduct TDS from your interest income even when it exceeds Rs.40,000. You can get the form:
- By downloading it from the bank’s website
- By visiting the bank physically
- From EPFO website
- From the Income Tax Department website
You can also fill in and submit Form 15G online. Most banks have the option of submitting Form 15G online. Once submitted at the start of a financial year, Form 15G remains valid for that year only. If you wish to give TDS on interest income a miss, make sure you submit Form 15G every year.
Technically, you should submit Form 15G only if your annual income is less than the threshold limit of Rs. 2.5 lakhs a year. However, please note that submitting Form 15G does not entitle you not to pay taxes for the interest income. It simply means that you would be paying the due taxes yourself at the time of submitting your ITR.
Form 15G components
Part A incorporates:
- Name as mentioned on your PAN card along with your PAN Card details
- Address and phone numbers
- Information on the current financial year
- Income details
- A declaration that the information you have provided is correct upto your knowledge.
Part B incorporates:
- Name, address and telephone number
- The PAN as well as TAN (Tax Deduction Allocation Number)
- Aadhaar Card details
- Sum received as income
Who can submit Form 15G?
You can submit Form 15G if:
- You are an individual, Hindu Undivided Family (HUF) or a Trust and not a company
- You are an Indian resident
- You are below 60 years of age
- Your taxable income is nil
- Your total interest income for that financial year doesn’t cross the basic exemption limit
Filling up Form 15G via the online process:
Fill in the following before submitting your Form 15G:
- Your name as the declarant along with your PAN card number.
- Your status: whether a resident Individual, trust or a HUF (Hindu Undivided Family)
- Pecuniary information of the current FY (financial year)
- Residential address including state, residency status and nationality
- Contact details including email address, phone number, etc.
- If your earning was more than the taxable limit for any month in the last six years then punch in “yes” when asked if assessed to tax under Income Tax Act, 1961.
- Type in the latest year when your income exceeded the taxable
- Mention your income received for which no TDS should be deducted
- Mention your overall income in that financial year
- Type in the total number of Form 15G you have submitted in the past
- Income details including the type of income, amount, etc.
How is Form 15G different from Form 15H?
Form 15G is different from Form 15H and how:
|Form 15G||Form 15H|
|Meant for individuals below 60-year-old||Meant for senior citizens|
|Applicable for HUFs as well||Not applicable for HUFs|
|Overall interest income should not exceed Rs2.5 lakh||No such criterion applicable|
|The interest income should cross Rs.40,000||The interest income should cross Rs.50,000|
Missed out on submitting Form 15G?
Missed out on submitting Form 15G on time? Has the bank deducted TDS? Depending on what’s more suitable for you, you can always get back the amount deducted through the following:
- Once deducted and deposited to the income tax department, the banks cannot refund your TDS. However, you can claim your TDS at the time of filing your income tax returns.
- Your TDS is usually deducted once every three months. Don’t fret if you forget to submit Form 15G at the beginning of the financial year. You can provide the bank with one at the earliest, and no TDS will be deducted for the rest of the financial year.
- Sign the form. Mention your role if signing on behalf of HUF or Trust
Points to remember
Make sure you’ve taken care of these matters when dealing with Form 15G:
- You ought to be less than 60 years old
- Ensure that you have put in the right information
- State the right assessment year
- Don’t exaggerate your estimated income
- PAN card is mandatory while submitting Form 15G.
- Ensure you collect the acknowledgement slip after submitting the form.
Where else can you submit Form 15G?
Here’re a few other places where you can avoid TDS by submitting Form 15G:
- TDS on EPF withdrawal before five years of service at a stretch, where the EPF amount exceeds Rs.50,000
- TDS on Corporate bonds exceeding Rs.5,000
- TDS on LIC premium receipts, if total taxable income is zero
- TDS on Post office deposits
- TDS on Rent received exceeding Rs.2.4 lakh annually
- TDS on Insurance commission exceeding Rs.15,000 annually.
Conclusion Only Indian residents below the age of 60 can submit Form 15G. NRIs are not eligible to claim TDS deduction even if they have FDs in India that generate interest income exceeding Rs.40,000.