Of late I have been receiving many queries from the readers about submission of forms to the banks so as to ensure that the bank does not [deduct tax at source]. In order to address those queries I have decided to write this article about form No. 15 G and 15H which banks normally ask depositors to fill in and file. There are different rules as to who can submit form no. 15G and who can submit form no. 15H. There are certain precautions one should take while submitting these forms.
When can the bank deduct tax at source?
Before I explain as to who can submit form no. 15 G and who can submit 15 H, let us first understand when bank deducts tax on the interest payable. The bank will deduct tax at source once the amount of interest to be credited in respect of all the fixed deposits taken together exceeds Rs. 10,000 in a financial year. This limit of Rs. 10,000 is applicable for all the branches of a bank, which has implemented core banking, taken together. One interesting point to be noted here, which many people are not aware, is that banks are not required to deduct any TDS on interest credited on your saving bank accounts even the amount of interest may be very substantial. Please note that in case of fixed deposits made for longer duration where the interest will be paid to you only on maturity, the bank will deduct tax at source on the interest accrued for the year even though no interest in fact has been paid to you. TDS is also applicable in Recurring deposit Account.
Who can submit form No. 15G?
First and foremost only any person who is resident in India for income tax purpose can submit form No. 15G. So an NRI can not submit this form. Any person other than a Company can submit form No. 15 G. So any Individual and HUF can submit form No. 15G. However it is not that every Individual or HUF can submit form No. 15G. Only the individual or HUF, whose tax on the estimated income for the year is nil and the amount of interest income from all the sources does not exceed the minimum exemption limit, can submit this form. So for being eligible for you to submit this form , you need to satisfy both the above conditions. In a situation where due to various deductions the tax payable on total income may be nil but if the total amount of interest income is expected to exceed Rs. 2.50 lakhs you cannot submit this form.
Who can submit form No. 15H?
Any resident Individual who is above sixty years of age or completes sixty years during the financial year can submit form No. 15H provided his tax liability on the basis of his estimated income is nil for the financial year though the total amount of interest from all sources may exceed Rs. 3.00 lakhs, the minimum amount liable for tax. So only senior citizens who does not have any tax liability an submit this form.
Persons eligible to submit the prescribed Forms are as under
Persons (not being the Company and
Income does not exceeds maximum amount which is not chargeable to tax
Individual who is of the age of 60 years or more
Individual is Not liable to pay tax on the total income for the previous year
Table showing Cases where/who can submit Form 15G-15H
Nature of Payment
Declaration in Form 15G-15H as per section
Eligible persons who can submit the Form
Dividends ( Excluding dividends referred in section115-O)
Payment under NSS
EPF withdrawal by Employee before rendering continuous service of 5 years
Persons other than
Firms and Companies
Interest on Securities
Interest (other than Interest on securities)
Payment of Life Insurance
Payment of income from units of Mutual Fund
What precautions to be taken while submitting form no. 15G and 15H?
Please ensure to submit your PAN details to the bank while submitting the form No. 15G or 15 H. In case you fail to provide your PAN number to the bank, the bank will deduct TDS @ 20% against the applicable rate of 10% even if you have submitted form no. 15G and 15H. I would advise you to submit a copy of your PAN card by way of separate letter and obtain written acknowledgement for the same. Please obtain acknowledgement for form no. 15G or 15H while submitting it. So it is advisable to get the form submitted personally rather than sending it through post so as to ensure proper acknowledgement
What if the bank has already deducted tax before submission of the form?
The form no. 15G or 15H as the case may be, should be submitted at the beginning of the year so as to avoid situation where bank has already deducted the tax before you submit the form. However in case the bank deducts the tax in spite of you having submitted the form or before you actually submit the same, the bank will not refund the tax already deducted, as the bank would have already deposited the tax with the government. In such a situation the only option available with you is to file your income tax return and claim the amount of TDS a refund.
Form 15G-15H can also be submitted by you online through your Internet Banking login account.
So even if you have not submitted the form applicable at the beginning of the year, you can still submit the same before the year end so as to avoid tax deduction at the end of the year in case the interest is credited at the end of the year by the bank.
I hope that from the above discussion it becomes clear that you need to comply certain conditions to be eligible for filing form No. 15G or 15H. Moreover you need to take certain precautions while filing these forms with the bank.
(The author is a CA, CS and CFP. He can be reached at jainbalwant at gmail.com and @jainbalwant)