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Save TDS on interest income: Form 15G & Form 15H
Form 15G and Form 15H are self-declaration forms used by individual taxpayers to request tax deductors, such as banks and financial institutions, not to deduct TDS if their estimated tax liability for the relevant financial year is Nil.
Under Section 194A of the Income Tax Act, 1961, banks must deduct TDS on interest income exceeding Rs. 40,000 (or Rs. 50,000 for senior citizens) in a financial year. However, if the taxpayer’s estimated tax liability is Nil, they can submit Form 15G or 15H to the bank to prevent TDS deduction from their interest income.
These forms can usually be submitted electronically through the banks’ or financial institutions’ online portals, or they can be physically submitted at the relevant bank branch.
Additionally, it’s important to note that these forms are valid for one financial year only and need to be submitted separately for each financial year.
Who Can Submit Form 15G
According to Section 197A(1A) of the IT Act in conjunction with Rule 29C of the IT Rules, 1962, residents who are under 60 years old, HUFs, trusts, or any other assessee whose estimated tax due for the applicable fiscal year is zero may file Form 15G. Any business, firm, or non-resident, however, would not be qualified to file Form 15G.
Who Can Submit Form 15H
Senior citizens (those 60 years of age or over) whose estimated tax liability for the relevant financial year is Nil may file Form 15H in compliance with Section 197A(1C) of the IT Act read with Rule 29C of the IT Rules, 1962.
Deadline for Submitting Form 15G and Form 15H
- Ideally, these forms should be submitted before the commencement of the financial year for which TDS deduction applies or before receiving the first income payment subject to TDS.
- However, they can be submitted at any time during the financial year.
- The deductor will honor these forms for the respective financial year from the submission date until the end of that financial year. For example, if the taxpayer submits the form in August, TDS deducted from April to August would only be refunded (if applicable) after filing the tax return. This can result in unnecessary funds being held by the taxpayer.
- Therefore, it is advisable to submit the forms well in advance to avoid TDS deduction on your income.
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