How to Fill Form 15G and Form 15H to Avoid TDS on Interest Income

How to Fill Form 15G and Form 15H to Avoid TDS on Interest Income. As an individual earning interest income in India, it’s important to understand how you can save on tax deducted at source (TDS) by submitting the right forms. Form 15G and Form 15H are self-declaration forms provided by the Income Tax Department that allow eligible individuals to avoid TDS on certain types of interest income. Let’s dive into the details of these forms and how you can use them effectively.

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What are Form 15G and Form 15H?

Form 15G and Form 15H are declarations that state your income is below the taxable limit, so you are seeking exemption from TDS on specific interest earnings. These forms need to be submitted at the beginning of each financial year to the banks or financial institutions where you hold deposits or investments generating interest income.

It’s crucial to note that submitting these forms does not exempt you from paying taxes altogether. If your total income exceeds the basic exemption limit, you are still required to file an income tax return and pay any taxes owed.

Eligibility Criteria for Form 15G and 15H.

Form 15G

• You must be a resident individual below 60 years of age, a Hindu Undivided Family (HUF), trust, or any person other than a company or firm.
• Your interest income from fixed deposits should be below the basic exemption limit of Rs. 2.5 lakhs.
• You should have no final tax liability for the financial year.
• You must have a valid Permanent Account Number (PAN).

Form 15H

• You must be a resident individual aged 60 years or above.
• You should have interest income and a final tax liability of nil.
• You must have a valid PAN.

When to Submit Form 15G and 15H

Form 15G and Form 15H are valid for one financial year. It’s best to submit these forms at the beginning of each financial year to avoid TDS deductions on your interest income. Banks and financial institutions are required to deduct TDS when the interest income exceeds Rs. 40,000 in a financial year (Rs. 50,000 for senior citizens).

Downloading Form 15G and 15H.

You can easily download Form 15G and Form 15H from the following sources:

• Official website of all major banks in India
• EPFO Unified Portal: https://unifiedportal-mem.epfindia.gov.in/memberinterface/
• Income Tax Department website: https://www.incometaxindia.gov.in/pages/downloads/most-used-forms.aspx

Many banks also provide the option to submit these forms online through their net banking portals.

How to Fill Form 15G and 15H.

Both Form 15G and Form 15H consist of two parts. Part I is to be filled by the individual claiming the exemption, while Part II is for the use of the person responsible for paying the income (the bank or financial institution).

Part I: To be filled by the declarant.

1. Provide your name, PAN, status (individual/HUF/trust), previous year (financial year), and residential status.
2. Fill in your complete address, email, and phone number.
3. Mention the section under which the declaration is being made (197A).
4. Specify the nature of income and the amount for which the declaration is being made.
5. Select the appropriate checkboxes based on your eligibility and tax liability.
6. Sign and date the declaration.

Part II: To be filled by the person responsible for paying the income.

1. Provide the name, address, contact details, and TAN of the person/institution responsible for paying the income.
2. Mention the PAN and Unique Identification Number (UIN) of the declarant.
3. Specify the amount of income paid or credited.
4. Fill in the date on which the declaration is furnished and the date on which the income has been paid/credited.

Precautions and Common Mistakes.

• Ensure you meet all the eligibility criteria before submitting Form 15G or 15H.
• Double-check all the information provided to avoid any errors that could lead to incorrect TDS deductions.
• Remember that submitting these forms does not exempt you from filing an income tax return if your total income exceeds the basic exemption limit.
• Do not submit false declarations, as it can lead to penalties and legal consequences under Section 277 of the Income Tax Act.

Benefits of Using Form 15G and 15H.

By submitting Form 15G or Form 15H, you can:

• Avoid TDS deductions on your interest income, thereby maximizing your earnings.
• Reduce the burden of claiming TDS refunds while filing your income tax return.
• Simplify your tax compliance process if your total income is below the taxable limit.

Applicability of Form 15G and 15H.

Form 15G and Form 15H can be submitted for various types of interest income, including:

• Fixed deposits and recurring deposits
• Savings account interest (if it exceeds the TDS threshold)
• Interest on bonds and debentures
• Interest on post office deposits
• Interest on National Savings Certificates (NSC)

Submitting Form 15G for PF Withdrawal.

Employees’ Provident Fund (EPF) withdrawals are subject to TDS under Section 192A of the Income Tax Act if the withdrawal amount exceeds Rs. 50,000 and the employee has rendered continuous service for less than five years. However, by submitting Form 15G along with your PF withdrawal request, you can avoid TDS on your PF balance.

To submit Form 15G for PF withdrawal:

1. Download the form from the EPFO Unified Portal or the Income Tax Department website.
2. Fill in the required details in Part I of the form, including your PAN, total income, and amount of PF withdrawal.
3. Sign and submit the form along with your PF withdrawal application.

Conclusion.

Form 15G and Form 15H are essential tools for individuals looking to save on TDS on their interest income. By understanding the eligibility criteria, filling the forms accurately, and submitting them on time, you can maximize your earnings and simplify your tax compliance process. Always remember to provide accurate information and file your income tax return if your total income exceeds the basic exemption limit.

FAQs on Form 15G and Form 15H

• Q: Can I submit Form 15G or Form 15H online?
• A: No, currently, these forms cannot be submitted online. You need to submit them physically to your bank or post office.
• Q: Can I submit multiple forms for different investments?
• A: Yes, you can submit multiple forms for different investments.
• Q: What if my income changes during the year?
• A: You may need to submit a new form if your income changes during the year.