What is Form 15G and Form 15H

Form 15G and Form 15H are forms which can help a person avoid TDS incase one does not have to pay income tax at the end of the year. Form 15H is for senior citizens and form 15G is for others. In this article we will see how a person can avoid payment of TDS by submitting these forms 15G and 15H.

form 15H and form 15G

Suppose your Father has invested Rs 20 lacs in a Bank FD . He gets interest @8% , that’s Rs 1.6 lacs per year . Now ideally he is not supposed to pay any tax on this because this income is less than the limit . But bank cuts the TDS @10% and pays Rs 16,000 to the govt as TAX (Note that TDS is cut only when interest income is more than 10,000) . To get back this 16,000 back , your father will have to file tax return and then wait for the tax refund to come back .

What is TDS

TDS means tax deducted at source , what it means is that instead of paying tax at the end of the year , the tax will be levied on the income as and when it arises and hence taken in advance with assumption that anyways the tax has to be paid later . So TDS will arise when your salary comes , when interest of your bank account comes , winning of Lottery and many such things, the rate at which TDS is cut varies from one thing to another and also its different for Resident Indian and NRI’s . Note that in case of Bank deposits , the TDS rate is 10% provided one has furnished his PAN details , otherwise if PAN details are missing the TDS rate is 20% , where as for NRI’s who earn interest on their NRO’s account are subject to 30% TDS .

Download Form 15H & form 15G

Let me tell you what are form 15G and form 15H . In one line, These forms are self declaration forms to be submitted if total taxable income of a person is going to be less than the permissible limits . So if a person is sure that he will not be required to pay any tax in a particular year , then he can submit for 15H or 15G to avoid deduction of TDS from his interest income and other kind of incomes where TDS is applicable . Note that these forms are not applicable for NRI’s.

Form 15H can be submitted by a person who is above 60 yrs (w.e.f 1/4/11) . An important point here is that a person should have not have paid any tax in the previous year . So only if one didn’t have any tax liability in previous year can submit form 15H . It should be submitted at the start of the year itself , so that TDS can be avoided , there is no point in submitting this at the end of financial year because by then TDS would be cut anyways . Form 15H can not be submitted by HUF’s .

Form 15G has the same purpose as Form 15H , just that this form should be submitted by a person below 60 yrs old (w.e.f 1/4/11) . Also this form can be submitted by HUF’s . Rest all things are common between 15G and 15H .

Download  Form 15G 

Download Form 15H

How NRI’s can avoid TDS or reduce the interest on TDS

Any Non Resident Indian from whose Income the Tax is likely to be deducted at source can apply to obtain exemption for tax deduction provided his/her taxable Income in India is less than Rs.1,50,000/- per year. Or if the tax likely to be deducted is more than the estimated tax liability, is eligible to apply for certificate permitting deduction of tax at lower rate. The income tax department generally issues Exemption Certificate for a period of 1 to 3 years.

Any NRI who has obtained Exemption Certificate need to submit it to the Payer of the income who will follow the certificate and not deduct tax or may deduct at a lower rate as given. If there is genuine mistake in representation for obtaining the Exemption Certificate, no penalty is attracted. However you may have to pay interest if you are liable to pay income tax later on. More info on this link

Thanks for Lokesh for this info

These forms have to be furnished separately for each financial year. For eg – If you have a 5 year FD, you’ll have to furnish Form 15G/Form 15H separately for each year. It is advised that you do the same in the beginning of the year to avoid any wrong dedcution of TDS. Are these form 15G and Form 15H applicable to you

402 CommentsAdd Comment

  1. jai

    if s person income is 8 lacs per year
    which is taxable. if i open a fd of 3 lack. for 2 years. if i submit a 15 g form then there is no no tds on interest of more than 10000.

  2. Tanuja

    Hi Sir,

    I dont have made any investment to declared as per the schedule 1,2,3,4,5 what I am suppose to fill then

  3. Prakhar

    I had deposited 50000 in my saving account for FD purpose.
    I made FD for 456 days to get 8% Interest i.e. around Rs 5000.
    Do I need to produce “form-15” and PAN card at the end of Financial year???.
    also does scholarship comes under income tax if it exceeds 200000???

    • Mohan

      Hi If interest amount is more than 10,000 only you have to submit FormG else not required, generally scholarship doesn’t come under income tax.

  4. anand

    Dear Sir,
    I want to know about schedule IV in form 15G, I am investing Rs. 2000 in mutual fund as SIP, from last 5 years. What should I mention in that, because how I calculate income in respect of unit(last block)

    Regards

  5. Faiyaz

    Dear Manish,

    I have read your articles, its a great info provider to no-voice persons about financial world. its Very Impressive !!

    I would like to open FD of 10Lakh for 2yrs on my wife name..
    As she is housewife, no source of income and her PAN card is also stated with same info. of No Income..

    As I am working abroad and I used to Remittance Money into her saving a/c

    Question i) The Interest earned on FD will be above 10k Per Annum, So it is taxable or Not? as she has NO source of income and NO income is shown in PAN Card.. ??

    Q ii) If yes, tax will be deducted.., then if she submit 15G form to avoid the tax earned on interest … it will be accepted or not ??

    Your answer is highly appreciated….

      • Mohan

        Hi, for every FD if the interest is more than 10k they will deduct TDS and later you may have to do IT filing and claim your returns. In order to avoid this you have to submit Form G so that they will not deduct any amount for any FD provided it should not cross 2.5L

  6. SAN

    Thanks Sir for the reply. But a problem arises with the FDs. (I did the FDs (Rs 14,60,000) SBI on 14/07/2015)

    While opening the FDs, I issued the cheques (5 lacs+5 lacs+ 4.60 lacs) of another Branch (SBI) and that A/C was in my mother’s name.

    So the FDs were made against my mother’s CIF No and my mother’s CIF No is printed on the certificates.

    The only solution given by the Bank official to change to my CIF No is to withdraw the FDs after 7 days of opening and get the entire amount Credited to my Savings A/C then again do the FDs again. Then only the FDs will be made against my CIF no.

    Could you please tell me Sir, if any amount will be deducted from my 14,60,000/- if I do the same.

    Waiting for your kind advice and reply Sir.

    Regards,
    SAN

  7. San

    Sir,
    I’m self-employed (40 yeasrs). Toady I did 3 FDs in SBI for (Rs 5 Lacs + Rs 5 Lacs + Rs 4,60,000) toatal Rs 14,60,000 @ 8.25%. Total yearly interest will be Rs 1,20,450. I’m going to submit Form 15G tomorrow. My yearly income is less than 3,00,000 which is the exemption limit for an individual.

    My question is,
    1) Will any TDS be deducted from my FD Interest income?
    2) What if my yearly income exeeds the minimum exemption limit in future?

    Regsrds,
    SAN

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