Form 15G Vs Form 15H - Usage and Eligibility

Did you know that interest income on fixed deposits in India can attract a TDS of 10% if it exceeds INR 40,000 annually (INR 50,000 for senior citizens)? However, if your total taxable income is below the exemption limit , you can avoid TDS deductions by submitting Form 15G or Form 15H.

These forms are essential tools for taxpayers who wish to save on taxes and avoid the hassle of claiming refunds while filing their Income Tax Returns (ITR). But which form should you use, and when?

Let’s break down Form 15G vs Form 15H differences, evaluating various aspects, including their definitions, eligibility, usage, and importance.

What Are Form 15G and Form 15H?

Form 15G and Form 15H are self-declaration forms submitted to financial institutions to prevent TDS on interest income.

These forms serve as declarations that your total taxable income is below the exemption limit, ensuring that TDS is not deducted from your interest income.

While Form 15G helps individuals below the age of 60 avoid TDS deductions, Form 15H is crucial for senior citizens to claim tax exemption on their hard-earned savings.

What Is the Eligibility for Form 15G and Form 15H?

Let’s take a closer look at the Form 15H and Form 15G tax-saving eligibility below:

Eligibility Criteria for Form 15G

• Age: Form 15G is designed for individuals below 60 years of age and Hindu Undivided Families (HUFs).
• Income: Your total taxable income, including interest, must be below the basic exemption limit of INR 2.5 lakhs.

Eligibility Criteria for Form 15H

• Age: Form 15H is specifically for senior citizens aged 60 years or above.
• Income: For senior citizens, your total taxable income, including interest, must be below INR 3 lakhs. For super senior citizens (aged 80 years or above), the income limit increases to INR 5 lakhs.

When to Use Form 15G and Form 15H?

You can use Form 15G and Form 15H for tax exemption in the following scenarios:

• Interest Income: Use these forms to avoid TDS on interest income from fixed deposits, recurring deposits, or savings accounts.
• Start of the Financial Year: Submit them early in the financial year to prevent unnecessary TDS deductions throughout the year.
• Multiple Accounts: If you have deposits across different financial institutions, ensure you submit the forms to each one to avoid inconsistent TDS deductions.
• EPF Withdrawals: If you withdraw your EPF balance before completing 5 years of service and the amount exceeds Rs. 50,000, TDS will be deducted. However, if you qualify for Forms 15G or 15H, you can submit them to avoid TDS deductions.

How to Fill Form 15G and Form 15H?

Most financial institutions allow you to submit Form 15G and Form 15H digitally through their net banking platforms. Filling out these forms is straightforward. You will typically need the following details:

• Personal Information: You will need to provide your full name, PAN card details, age, address, contact information, and other relevant details.
• Declaration of Income: Enter your total estimated income for the financial year.
• Financial Year: Specify the financial year for which the form is being submitted.

*Please note that this list is not exhaustive. Refer to the official Income Tax Department website for the most up-to-date information on filling out Form 15G and Form 15H.

What Is the Importance of Submitting Form 15G and Form 15H on Time?

Submitting the Form 15G or Form 15H on time has multiple advantages, such as:

• Avoids the Hassle of Refunds: Late submission of these forms leads to unnecessary TDS deductions, forcing you to file for a refund during ITR filing. Since this process can be time-consuming and tedious, it's better to submit Form 15G and Form 15H on time.
• Ensures Better Cash Flow: Timely submissions allow you to receive your interest income without deductions.
• Compliance with Tax Rules: Submitting Form 15G or Form 15H at the start of the financial year helps ensure compliance with tax regulations and minimises the risk of errors or disputes later.
• Applicable for Multiple Accounts: If you have fixed deposits or savings across multiple financial institutions, timely submission ensures that all interest income is considered for TDS exemption.

Is Form 15G or Form 15H Mandatory?

No, submitting Form 15G or Form 15H is not legally mandatory. However, these forms are essential for taxpayers looking to avoid unnecessary TDS deductions on interest income when their total taxable income falls below the exemption limit.

If you fail to submit these forms, financial institutions are obligated to deduct TDS on your interest earnings as per standard rates (10% if PAN is provided, 20% otherwise). This applies regardless of whether your annual income is taxable or not.

For senior citizens, Form 15H for TDS exemption becomes especially significant. Fixed deposit interest often serves as a primary income source after retirement, and unnecessary deductions can disrupt cash flow and financial health.

While these forms are not mandatory, timely submission helps you retain more control over your interest income without having to wait for refunds. It simplifies tax compliance, avoids administrative hassles, and allows smoother financial management throughout the year.

Conclusion

Forms 15G and 15H are valuable tools that help taxpayers avoid unnecessary TDS deductions on interest income. Form 15G benefits individuals under 60 years of age, while Form 15H is specifically for senior citizens to claim TDS exemptions.

By submitting the correct form, you can prevent TDS deductions, which allows you to retain more of your interest income. A higher income can be vital when applying for loans, as it strengthens your financial profile and demonstrates better repayment capacity to lenders.

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