Introduction to TDS on Interest Income
TDS is deducted on interest earned from fixed deposits, recurring deposits, or other term deposits when the interest exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). This means that even if your total annual income is below the taxable limit, you might still face TDS cuts if you don’t submit the right forms in time.
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What is Form 15G?
Form 15G is a self-declaration form that can be submitted by individuals below 60 years of age or Hindu Undivided Families (HUFs) to request banks or other institutions not to deduct TDS on interest income .
Eligibility for Form 15G
- You must be an Indian resident
- You should be below 60 years of age
- Your total income should be below the basic exemption limit
- The interest income must not exceed the exemption limit after all deductions
If all the above conditions are met, you can fill out Form 15G online or offline and submit it.
What is Form 15H?
Form 15H is similar to Form 15G but is meant for senior citizens. It is used to declare that their income is below the taxable limit and hence TDS should not be deducted.
Eligibility for Form 15H
- You must be a resident Indian aged 60 years or above
- Your total income after all deductions should be less than the taxable limit
- Interest income should not push your income into the taxable bracket
- Even if the interest income is higher than ₹50,000, senior citizens can still use Form 15H if their final taxable income is nil.
Key Differences Between Form 15G and Form 15H
| Criteria | Form 15G | Form 15H |
|---|---|---|
| Age Group | Below 60 years | 60 years and above |
| Who Can Submit | Individuals & HUFs | Only Individuals (senior citizens) |
| Income Condition | Taxable income must be below limit | Same, but more lenient due to higher exemption limit |
| TDS Limit on Interest | ₹40,000 (banks) | ₹50,000 (banks) |
How to Fill Form 15G and Form 15H
If you’re wondering how to fill Form 15G or how to fill Form 15H, here’s a quick guide:
- Personal Details – Name, PAN, Date of Birth, Address
- Status – Individual or HUF
- Income Details – Estimated income from interest and total income
- Previous Year’s Filing Info – If applicable
- Declaration – You must certify that your income is below the taxable limit
You can fill out the 15G form online through most bank net banking portals or submit it manually at a bank branch.
Where to Submit Form 15G and Form 15H Apart from Banks
While banks are the most common place to submit these forms, you can also give them to:
- Post offices (for interest on post office deposits)
- Corporate bond issuers
- EPFO (for withdrawal of EPF without TDS if eligible)
- Financial institutions offering recurring or term deposits
Make sure to submit them at the start of the financial year to avoid unwanted deductions.
Common Mistakes to Avoid While Filing Form 15G or 15H
- Giving incorrect PAN or missing it altogether
- Submitting the form without checking eligibility
- Not declaring the actual interest income
- Submitting the form after TDS has already been deducted
- Not keeping a copy or acknowledgement for your records
Filing errors may result in delayed refunds or TDS being deducted despite submission.
When Can TDS Be Deducted Despite Submitting Form 15G/15H?
- If your interest income crosses the basic exemption limit
- If there are errors in your declaration or PAN
- If the form is submitted late, after the bank has already processed interest payout
- If your income exceeds the limit later in the year due to other sources of income
In such cases, you can claim the deducted TDS while filing your income tax return.
Benefits of Submitting Form 15G and Form 15H
- Prevents unnecessary deduction of TDS
- Saves time and effort of claiming refunds
- Ensures better cash flow, especially for senior citizens or low-income individuals
- Makes the financial year tax-compliant without advance tax hassles
These forms are beneficial for retirees, students, homemakers, and others with no taxable income.
I am a Fellow Chartered Accountant (FCA) and LLB graduate with 10 years of experience in corporate auditing, taxation, and financial consulting. My expertise includes corporate audits, income tax planning, HSN code classification, and GST rate advisory. Through my blogs and articles, I aim to simplify corporate taxation, auditing, and GST compliance, making financial matters more accessible for professionals and business owners.
Frequently Asked Questions (FAQs)
- Can I submit Form 15G or 15H multiple times?Yes, you can submit them to different banks or institutions if you have multiple deposits. But you must declare total interest income across all sources.
- What happens if my income exceeds the taxable limit after submitting Form 15G/15H?If your income increases during the year and goes beyond the exemption limit, you’ll need to pay tax while filing your return. However, no penalty is charged for an honest declaration made earlier.
- Does BUSY automatically generate Form 15G/15H for me based on my income?BUSY accounting software can assist in tracking TDS and interest income. Still, auto-generation of Form 15G/15H depends on whether your profile and income details are updated accurately in the system. Check with your software provider for this feature.
