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Form 15g and 15h to save TDS

Tax deduction at source (TDS) is a tax deducted from certain payments such as salary, rent, commission, professional fees, etc. Thus the recipient receives the amount after deduction of the tax amount in form of TDS. This type of deduction can create hurdles for those who depend on interest from banks or recurring deposit investments as a source of their income and their income does not fall in the taxable income criteria.

TDS is deducted by banks/financial institutions at the time of payment of interest to the customers, so the customers receive the net amount after deduction of tax. If the customers want to avail the benefit of exemption over TDS, they can do so by filing Form 15G and Form 15H as per the Act.

What are form 15G and form 15H?

In accordance with Rule-29C of the Income-tax Rules, Form 15G and Form 15H serve as a declaration, submitted by an individual to the bank making a request for not deducting TDS on interest income as their income falls below the taxable criteria. As per the stated rule, the declaration can be furnished in the following manners:

  • As a physical copy (in paper form);
  • In electronic form, to be verified through the electronic process as provided in sub-rule (7).

What are the eligibility criteria for filing form 15G and form 15H?

FORM 15G

FORM 15H

A declaration that can be filed under sub-section (1)/(1A) of section 197A.

A declaration that can be filed under sub-section (1C) of section 197A.

An Individual resident of India below 60 years of age or by a Hindu Undivided Family (HUF).

An individual resident in India, whose age is sixty years or more at any time during the previous year.

A company/firm/any other organization is not eligible to file such declaration.

A firm/HUF/company is not eligible to file such a declaration.

The total interest income for the relevant financial year must be below the basic exemption limit to claim such exemption.

Estimated tax payable on the total income for the relevant financial year should be nil.

Key Elements:

  • Where the income is below the taxable limit, one can file a declaration in Form 15G and 15H as a request for not deducting the TDS from their income.
  • Such forms cannot be filed by a company or a firm.
  • These are not one-time declarations, rather it has to be submitted every year.
  • It acts as an important tool for gaining tax exemption.
  • NRIs cannot claim exemption through these forms (both Form15G and 15H).
  • Both the forms can be downloaded from the website of the bank, Income tax website or can be obtained through Bank in physical mode. Likewise, it can be submitted online or offline mode.
  • For submitting Forms 15G and 15H, a Permanent Account Number (PAN) is mandatory.
  • Where any false declaration is submitted, it will attract the provision of Section 277 of the Act. Where such person shall be punishable with imprisonment of not less than three months which may extend to seven years, and fine as per the amount of tax evaded.

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