Forms 15G & 15H – Save TDS on Interest Income

What is Form 15G?

As mentioned in sub-section (1) and (1A) of section 197A of the Income Tax Act introduced in 1961, Form 15G is a declaration, whereby an individual and not a company or firm may profess assured receipts with no deduction of tax.

What is Form 15H?

As mentioned in sub-section (1C) of the section 197A of the Income Tax Act introduced in 1961,

1. Only individuals below the age of 65 years or belonging to a Hindu Undivided Family (HUF) may resort to Form 15G.
2. Prior to the initial payment of interest on a fixed deposit, Form 15G shall be presented.
3. In addition, this form has to be submitted to the deductors from whom a loan was sought. In conclusion, the individual is required to submit the form to each bank branch in the course of which the entity is accumulating interest.
4. Only those individuals with tax billed on their total returns are zero may submit this form.
5. Only a resident of India may submit this form.
6. Only when the entire interest earnings are below the minimum exclusion amount for the existing year, only then one resorts to this form. The lowest amount exemption amount for the year 2015 to 2016 was Rs.2,50,000.

Form 15H is a declaration, whereby an individual aged 65 years or more may profess assured receipts with no deduction of tax.

When is Form 15H submitted ? What are the rationales for submission of Form 15G and 15H?

Usually, Form 15G and Form 15H are presented to banks in order to put a stop to the deduction. The eligibility required to put forward this declaration is as follows:-

1. Only individuals attaining the age of 65 years during the submission may resort to Form 15H. Furthermore, 1st July 2012 onwards, the age limit has been trimmed down to 60.
2. In the previous year, the anticipated tax should be zero. In addition, the person should refrain from paying tax in the previous year since the person’s earnings should be lower than the taxable total.
3. In addition, this form has to be submitted to the deductors from whom a loan was sought. In conclusion, the individual is required to submit the form to each bank branch in the course of which the entity is accumulating interest.
4. Prior to the payment of the primary interest, Form 15H should be put forward to the bank. Though this step is not mandatory, however, it will put a stop to the bank from with holding the TDS.
5. In case the interest from solitary branch go beyond Rs.10,000 in one year, then Form 15H will need to be presented to the banks.
6. Under any circumstances, if the interest profits from any foundation except the deposit namely- advance, interest on a loan, debentures, bonds, and more go above Rs.5,000 in one year, then Form 15H shall be presented positively.

TDS on interest. However, there are other reasons for which these forms can be submitted. A deduction of TDS is eligible for EPF, where the entity can extract the EPF prior to the end of 5 years of incessant service. In case EPF balance of the individual exceeds Rs.50,000, and if he / she desires to extract it prior to the completion of 5 years of constant service, thereafter the individual may resort to either Form 15G or Form 15H.

Additional information about Form 15G and 15H

1. TDS dedicated for EPF extraction is one of the reasons for which these forms can be used.
2. TDS applicable on income assembled from corporate bonds also falls under this category: Any entity is entitled to a tax deduction of TDS from corporate bonds, in case the earnings accumulated from them goes beyond Rs.5,000.
3. TDS applicable on earnings from post office deposits is another category : Post offices which are digitized administer TDS will recognize Form 15G and Form 15H only when an individual fulfill the eligibility criterion.
4. Next is TDS on rent : A deduction of TDS solely applicable on rent renders that, when the total rental expense annually goes beyond Rs.1.8 lakhs, then the entity’s entire revenue is zero, then the person can present Form 15G and Form 15H to appeal to the leaseholder not to hold with TDS.
5. Form 15G and Form 15H is submitted by an entity to a bank along with valid PAN Card details. On failure of this, the tax will be deducted at 20% rate. As a result, it is wise to submit a duplicate of the PAN card attached with the cover letter.
6. The individual shall guarantee that an acknowledgment is received when Form 15G or Form 15H is submitted. This is necessary as an acknowledgment while submission of PAN details can resolve a conflict with the bank.
7. The modified form allows the entity to submit the information of the Form 15G and Form 15H to other banks as well. In addition, the interest income amount is also stated in these forms.
8. On completion of submission of PAN card details by the individual, the relevant appraisal officer is entitled to access all the details submitted by the person to other banks. Additionally, the officer shall examine and detect any erroneous information put forward by the individual.
9. The Indian regulation states a stipulation for incarceration for at least three months, in case an individual is found guilty of entering inaccurate information in the above-mentioned declaration forms.

In conclusion “Forms 15G AND 15H- Save TDS on Interest Income” is an important article which informs people about the benefits of these declarations. Form 15G and Form 15H are applicable for a single financial year. These forms are submitted annually by individuals who are eligible. Prompt submission will ensure that banks refrain from deducting any TDS on the interest income. Hence, a complete knowledge is essential before submitting these forms.