Banks deduct Tax Deducted at Source (TDS) when interest income earned by an individual is more than INR 10,000. But if your total income is below the taxable limit, you can simply submit Form 15G to the bank requesting them not to deduct any TDS on the interest that you have earned in a financial year. Interest income is the money earned by holding a substantial amount in any one of your savings account. This form can be downloaded from the respective bank website or by branch visit. A PAN is mandatory when applying for this form. Form 15G is valid for a single financial year, and hence, has to be submitted every year. It is advisable that you submit Form 15G at the beginning of the financial year to avoid any deductions by your bank.
The following conditions must be met for the successful submission of Form 15G.
You can be an individual, Hindu Undivided Family (HUF) or Trust, but not a company or a firm.
You must be a resident of India.
You should be less than 60 years of age.
Your income tax calculated should be nil.
The total interest income for the year is less than the basic exemption limit of that year, which is INR. 2,50,000 for financial year 2017-18 (AY 2018-19)
Let us illustrate an example to understand how Form 15G works.
| Criteria | Person A | Person B |
|---|---|---|
| Name | Munna | Anna |
| Age | 50 Years | 25 Years |
| Salary - Annual | 1,80,000 | Unemployed |
| Interest Income from FD | 85,000 | 2,60,000 |
| Income Before Section 80 Deductions | 2,65,000 | 2,60,000 |
| Deductions Under Sec 80 | 45,000 | 30,000 |
| Taxable Income | 2,20,000 | 2,30,000 |
| Minimum Exempt Income | 2,50,000 | 2,50,000 |
| Form 15G | Yes | No |
FD: Fixed Deposit
In the case of Munna, Form 15G has to be submitted as the age is below 60 years and total tax is nil and interest income is less than minimum exempt income.
In the case of Anna, Form 15G is not applicable since interest income is more than the basic exemption limit.
Form 15G is a two page application form comprising of Part A and Part B.
Part A consist of:
Name and PAN details.
Details about the financial year.
Address and contact details.
Details about income - including nature of income and section under which it is deductible.
Declaration stating that the information provided is accurate and not misleading.
Part B consists of:
Name of individual with tax liability.
PAN and TAN details.
Aadhaar number.
Address and contact details.
Amount of income paid.
Here are a few things which should be checked before filing Form 15G.
Eligibility - ensure that you are less than 60 years of age.
Double check your duly filled details.
Mention the correct assessment year.
Do not overstate your estimated income.
A copy of your PAN card is required along with Form 15G for submission.
Post submission, do not forget to take an acknowledgement slip.
The main difference between Form 15G and 15H is that 15H is meant for senior citizens only. This is because interest rates are different for senior citizens and normal individuals. Form 15H can be submitted by a senior citizen who has crossed the age of 60, if they are eligible for TDS. The maximum limit for senior citizens for the financial year 2017-18 and 2018-19 is INR. 3,00,000.
You can visit your respective bank’s website to download Form 15G or fill it online from the bank’s website itself. You need to fill the following details.
Name of Declarant - Your name
PAN card details - Your PAN number
Status - To distinguish between an individual, HUF or a Trust
Previous Year - It refers to the current financial year for which you are filling up the form
Residential Status - Mention your nationality
Address Details - Your residence and contact details such as email, phone number, state, city and PIN code.
Option A - Whether assessed to tax under the Income Tax Act, 1961? - If your income was above taxable limit in any of the past 6 years, answer this question with ‘yes’
If yes, then you have to mention the latest year in which your income was above taxable limit
Estimated income for which declaration is made - Your income on which TDS should not be deducted
Estimated total income of the previous year in which income mentioned in column 16 to be included - Calculate your total income that you have earned during the year.
Details other than Form 15G - If you have filled Form 15G in the past, mention the total number of forms
Details of income for which declaration is filed - Nature and amount of income
Once you have mentioned the above details, ensure that you are filing for yourself or on behalf of HUF or Trust.
What is Form 15G?
If your total income is below the taxable limit, you can simply submit Form 15G to the bank requesting them not to deduct any TDS on the interest that you have earned in a financial year.
Is Form 15G required for PF withdrawal?
If you intend to make an early withdrawal from your PF of INR. 50,000 or more, you can apply for Form 15G.
What is the difference between Form 15G and 15H?
The main difference between Form 15G and 15H is that 15H is meant for senior citizens only. This is because interest rates are different for senior citizens and normal individuals.
What is estimated income in Form 15G?
Estimated Income in Form 15G is the income that you have earned in a current financial year.
What is the purpose of Form 15G?
The purpose of Form 15G is to ensure that an individual does not face any deductions or TDS on income earned from interest.
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