What is Form 15G and Form 15H?

A brief discussion about what is Form 15G and 15H, their purpose and relevance.

As per the provisions of the Section 194A of the Income Tax Act, 1961, Banks and other Financial institutions are obliged to deduct TDS, on payment of interest.

TDS on interest is deducted on payment of interest which exceeds Rs. 40,000 (It was Rs.10, 000 before F.Y year 2019-20) in any given financial year. However, the threshold limit for Non-Banking Financial Company (NBFC) is still Rs. 5,000/-.

As we know that for the financial year 2019 – 20 & 2020 – 21, Individuals whose annual income is in excess of Rs 2.5 lakh are liable to file income income tax returns and pay taxes accordingly.

To know more about Income tax slab rates for the FY 2019 – 20, please read our blog. 

There are several benefits of filing ITR even if there is no tax liability, Check it now.

So, there may come situation when income of an individual / HUF is below maximum amount not chargeable to tax. In such case, if he earns interest from bank, of more than Rs.40,000/- in a year, bank will deducted TDS. However, in totality there would be no taxable income as his aggregate income is below maximum amount not chargeable to tax.

There comes a question in mind.

Is there any way to avoid deduction of TDS on Interest income, if aggregate income is below maximum amount not chargeable to tax??

Answer is YES.

 

Let’s discuss how to save TDS on Interest Income.

If total income of individual / HUF is below the taxable limit, he can submit Form 15G or Form 15H (as per its applicability) to the bank requesting them not to deduct any TDS.

In this article you will get to know about following :-

 

 

What is Form 15G and Form 15H? 

Form 15G and Form 15H are self-declaration form. Such forms are submitted by assessee to his bank in order to prevent from deductions of TDS on interest payments.

These self-declaration forms which are valid for one financial year.

These forms should be submitted by the assessee to his bank for  Nil or lower deduction of TDS on interest on payments. Suce interest payments may include interest on fixed deposits, recurring deposits, saving schemes like provident funds etc.   

 

Applicability for filing Form 15G and Form 15H.

Form 15G is applicable for Resident Indian Individual, HUF or trust, who are below the age of 60 years.

Form 15H is for Resident Indian Individual, who are of 60 years or above in age.   

 

What are the conditions need to be fulfill for filing Form 15G? 

1. Assessee must have a valid PAN.
2. Any Individual, HUF or Trust can file this form, but a Company or a Firm can not file.
3. Only Indian Residents can submit this form.
4. Age of assessee should be less than 60 years.
5. The computation of tax on total income must be NIL.
6. Aggergate Interest Income should be less than the basic exemption limit of the given financial year.  

 

What are the conditions need to be fulfill for filing Form 15H?

1. Assessee must have a valid PAN.
2. Only Individual Indian Resident can submit this form.
3. Age of assessee should be 60 years or more than 60 years.
4. The computation of tax on total income must be NIL.
5. Aggergate Interest Income should be less than the basic exemption limit of the given financial year.   

 

What could be the other purpose for filing Form 15G or Form 15H? 

Apart from interst income from Bank, an assessee can request other organization for no deduction or lower deduction of TDS in following cases:-

• TDS on EPF Withdrawal – TDS is liable to deducted, if an assessee withdraws EPF balance before 5 years of continuous service. However, assessee has option to file Form 15G / Form 15H before bank if abovementioned conditions are fulfilled.

• TDS on Insurance Commission – If insurance commission exceeds Rs 15000/- in a year, in that case TDS is deducted. However, assessee has option to submit Form 15G/Form 15H for non-deduction of TDS if tax on his total income is NIL.

• TDS on income from corporate bonds – If an assessee holds corporate bonds, and earns income from it of more than Rs 5,000/- then TDS is deducted. However, assessee has option to file Form 15G / Form 15H to the issuer requesting for non-deduction of TDS.

• TDS on Rent – If an assessee earns rent from a property of exceeds Rs 2.4 lakh then TDS is liable to be deducted. In this case also, assessee has option to file Form 15G/15H to request the tenant to not deduct TDS. Provided, aggregate tax payable on income is NIL and all abovementioned conditions are fulfilled.

• TDS on Post Office Deposits – Assessee can file Form 15G / Form 15H to post office also, if all the conditions applicable for submitting such forms are fulfilled.   

 

How to fill Form 15G and Form 15H? 

Form 15G and Form 15H can be filed by following two modes:-

1. Paper or Physical Mode.
2. Electronic Mode.

To make the process hassle free, in 2015 the government granted the permission to fill and submit the forms online. The following steps will help to understand the process to fill the forms.

• Select the relevant form and fill in the different field.
• Attach a copy of PAN along with a declaration.
• Submit the form to the Banker (for interest income).
• Collect the acknowledgment from the Banker.

Important :- The assessee must provide the relevant Form to his Bank before the bank deducts tax at source. 

 

How to download Form 15G and Form 15H?

The assessee can download the Form 15G / Form 15H online. The forms are available on the website of Income Tax Department.

The following steps will help in downloading the forms.

1. Visit the official website of Income Tax Department.
2. Under the head “Forms/ Download”, Select Income Tax Forms.
3. Find Form 15G or Form 15H and click on PDF icon.
4. The Selected form will appear in a new tab.
5. Click on “Download” icon to save the form on your device.

And this is how the assessee can download a soft copy in a PDF format of Form 15G and Form 15H.

We hope that this article will help you regarding the purpose and imporatance of Form 15G / Form 15H. If you require any assistance in filing of Form 15G / Form 15H or any other related matter, Manthan Experts is available for assitance. Feel free to contact your Trustworthy Advisor at info@manthanexperts.com.

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Knowledge Source:

A Comprehensive Guide on TDS