The interest you receive from bank accounts and deposits is fully taxable. Thus, the bank is supposed to deduct TDS (Tax Deducted at Source) from it every year if your interest exceeds ₹50,000. (The limit is ₹1 Lakh for senior citizens.) But what if your total taxable income in a financial year is less than the maximum tax-exempt limit, i.e., ₹2.5 lakhs under the old regime or ₹4 lakhs as per the new regime for the FY 2025-26 (AY 2026-27)?
In such a case, you can submit Form 15G and Form 15H to avoid TDS on interest income. You are on the right page if you are wondering what Forms 15G and 15H are. This blog will provide you with the details.
Key Takeaways
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Form 15G and Form 15H are self-declaration forms that allow taxpayers to request an exemption from TDS (Tax Deducted at Source) on their interest income. To qualify, your total income must not exceed the basic exemption limit set by the Income Tax Act, and a PAN card must be attached to the form.
To understand how you can avoid tax deduction at source (TDS) on your interest income, it’s important to know what Form 15 G and Form 15H are, and who can use them.
With a year's validity period, Form 15G and 15H prevent unnecessary TDS deductions. This is particularly helpful for those whose income is genuinely below the taxable limit. However, both forms have unique features. Here’s a quick overview of the same:
The differences between Form 15G & 15H can be classified as follows:
15 G Form | 15 H Form | |
Who can file? | Resident Indians below 60 years of age Hindu Undivided Family (HUF) Trusts | Resident Indians aged 60 years or above |
When to submit? | Total income (including interest) is below the basic exemption limit, and tax liability is nil | Resident individual (60+), with nil tax liability, irrespective of interest amount |
Why submit? | Save TDS on interest payments | Save TDS on interest payments |
Where to submit? |
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Validity | Valid for one financial year, must be submitted each year afresh | Valid for one financial year; must be submitted each year afresh |
Where to get the forms? | Banks, Post Offices, Insurers, Income Tax website | Banks, Post Offices, Insurers, Income Tax website |
Compulsory document | PAN | PAN |
As a breadwinner who earns just below the TDS limit, Form 15G and 15H are blessings. But hold on before you get filled with excitement. There are specific eligibility conditions to meet.
These forms are primarily based on your age and total taxable income. Hence, to ensure that you truly qualify to benefit from this exemption, read further to learn more about what Form 15G and 15H eligibility criteria are.
15G is meant for individuals below 60 years of age who wish to prevent TDS deduction on their interest income. The following are the eligibility criteria that you must meet to ensure 15G’s qualifications:
The individual or a Hindu Undivided Family (HUF) must be below 60 years of age.
Total taxable income should be below the basic exemption limit (₹2.5 lakh for individuals below 60), opting for the older regime, or ₹4 lakhs as per the new regime.
The total interest income should not exceed the taxable limit.
Example: Mr Shekhar, aged 30, has a total taxable income of ₹2.25 lakh after deductions. Since his income is below the exemption limit of ₹2.5 lakh, he is eligible to submit Form 15G.
On the other hand, Mr Grover, aged 50, has an interest income of ₹2.6 lakh, pushing his total income beyond the exemption threshold. So, he can not submit Form 15G.
15H Form is designed for senior citizens (aged 60 and above) who want to claim exemption from TDS on their interest income.
The eligibility conditions include:
Applicants must be resident individuals aged 60 years or above
Tax on estimated total income for the year must be nil (after deductions/rebate), even if interest income exceeds the basic exemption limit
The exemption limits based on age are:
₹3 lakh for individuals aged 60-79 years
₹5 lakh for individuals who are 80 years or above
These age-wise limits are basic exemption benchmarks under the old regime, used to check if tax becomes nil. They are reference points, not rigid caps beyond which Form 15H is automatically disallowed; eligibility depends on having nil final tax liability.
Example: Mr Vyas, aged 62, has an interest income of ₹2.8 lakh. He is eligible only if, after deductions and rebate, his final tax liability is nil; being under ₹3 lakh alone is not a sufficient explanation.
Similarly, Mr Chopra, aged 81, has an interest income of ₹3.3 lakh, making his total income ₹5.3 lakh. He is not eligible because his total income leads to a positive tax liability, not merely because it exceeds ₹5 lakh.
Here is an example of Form 15G and Form 15H eligibility in different income and age scenarios:
Age | Mr Shekhar, aged 30 years | Mr Grover, aged 50 years | Mr Vyas, aged 62 years | Mr Chopra, aged 81 years |
Salary | ₹120,000 | ₹4,50,000 | - | - |
Pension | - | - | ₹120,000 | ₹200,000 |
FD interest income | ₹105,000 | ₹260,000 | ₹280,000 | ₹330,000 |
Total income before Section 80 deductions | ₹2,25,000 | ₹710,000 | ₹400,000 | ₹530,000 |
Deductions under Section 80 | ₹24,000 | ₹130,000 | ₹100,000 | ₹55,000 |
Taxable income | ₹ 2,01,000 | ₹5,80,000 | ₹300,000 | ₹475,000 |
Minimum exempt income | ₹ 2,50,000 | ₹2,50,000 | ₹300,000 | ₹500,000 |
Age | Below 60 | Below 60 | Above 60 | Above 60 |
Tax on total income is Nil | Yes | No | Yes (after rebate) | No |
Interest income is less than the basic exemption limit | Yes | No | N.A.(not required for 15H) | N.A. (not required for 15H) |
Eligibility for Form 15G/15H | Form 15G | Not Eligible | Form 15H | Form 15H only if the final tax is Nil; otherwise, not eligible |
Key takeaways from the illustration:
Mr Shekhar, at the age of 30, has a total taxable income of less than ₹2.5 lakh under the old regime and is eligible for Form 15G.
At age 50, the total interest income of Mr Grover exceeds the maximum tax-exempt income limit of ₹2.5 lakhs for his age. This criterion alone disqualifies him from using 15 G Form.
At 62, even though the interest income of Mr Vyas exceeds ₹2.5 lakhs, he is eligible to use Form 15H. This is because the interest income remains below the maximum exempt income of ₹3 lakhs for the age.
Similarly, at the age of 81, the maximum exempt income is ₹5 lakhs under the old regime. However, Form 15H is allowed as long as the total tax liability is nil, even if interest income is above ₹5 lakh after considering deductions and rebate.
You should ideally submit your Form 15G or Form 15H at the beginning of the financial year, provided your expected income in the financial year will not exceed the maximum tax-exempt amount. This will help you avoid any TDS on interest for the financial year.
Banks must now assign a UIN and upload Form 15G/15H declarations digitally every quarter; records are kept for 7 years.
Source: incometaxindia.gov.in
Some banks and financial institutions may allow you to fill out Form 15G and 15H online. You can submit the following details to complete your declaration:
Option A: Select ‘Yes’ if your taxable income was more than the maximum exempt limit in the past six years
Mention the latest year when your taxable income exceeded the maximum exempt limit
Estimated income for which the declaration is made: Estimated income of the current previous year
Estimated total income of the P.Y.: This is the income of the current PY that you have already received
Details of other Form 15 G (or 15 H) filed in the P.Y.: Enter the number of forms filed during the previous year and the aggregate income amount for those years
Details of income for which declaration is filed: Provide the income sources, nature, Income Tax Section, and amounts of income
Form 15G typically consists of 2 parts:
Part 1: It consists of multiple fields where you need to add personal details like name, address, contact details, PAN, annual income, financial year details, the total number of Form 15G applicable for FY, aggregated income, place, date, and signature of the applicant. These details need to be filled out by individuals making claims on TDS on interest income.
Part 2: The form includes information regarding the individual or entity responsible for disbursing income to the declarant, such as banks or tenants. Required details comprise the TAN (Tax Deduction and Collection Account Number), name, full address, amount of income, tax paid, and date of payment.
Submitting Form 15G & 15H is an annual activity. So, it’s easy to forget. If you have had the bank deduct TDS due to this delay in submission, you should not worry. Use the following routes to minimise the TDS flow and recover the amounts:
You need to submit Form 15G or Form 15H to the relevant institution that deducts TDS from your income. These forms can be submitted to banks for interest earned on fixed deposits and savings accounts. You can also submit them to the Employees' Provident Fund Organisation (EPFO) if you withdraw EPF before five years of service.
Moreover, if you are receiving rental income, the form should be submitted to the lessee, provided they are a corporate entity or an Association of Persons (AOP). For those earning interest from bonds, submission to the bond issuer is necessary. Similarly, if you have interest income from deposits in a post office, you need to submit the form there to prevent TDS deductions.
You can submit 15G Form & Form 15H to avoid TDS on interest income by the bank. However, banks are not the only places you can use Form 15G & 15H. The following payments also face TDS deductions, and you can use Forms 15G and 15H to avoid TDS:
TDS on EPF Withdrawals: If you wish to withdraw your EPF balance before completing five years of service, a TDS may be applied to the amount. EPFO will deduct TDS on the withdrawal amount if it exceeds ₹50,000, and for that, you can submit Form 15G or 15H. The TDS rate is 10% for such a withdrawal if you have provided PAN. If not, the rate goes to the maximum marginal rate.
TDS on Corporate Bond Interest Payments: If your interest income from the corporate bond investment exceeds ₹5000 in a financial year, TDS will apply to the amount. However, you can submit Form 15G & 15H to avoid this.
TDS on Post Office Deposits: The post office will apply TDS to the interest payment under the Senior Citizen Savings Scheme if the amount exceeds ₹50,000. You can submit Form 15H to avoid the TDS.
TDS on Rental Income: If you are receiving rent on a property from a firm or association of persons, and the annual rent under section 194I exceeds ₹2.4 lakh (as per the then‑applicable threshold), TDS may apply to the receipts. The lessee (party paying the rent) should deduct TDS at 10% on the rental payments. In such eligible cases, you can submit Form 15 G or Form 15 H to avoid TDS if your overall tax liability is nil.
TDS on Insurance Commission: Tax Deducted at Source applies to insurance commissions exceeding ₹20,000 annually. If their total income tax liability is nil, insurance agents can submit Form 15G or Form 15H to prevent TDS deduction.
TDS on Dividends: Similarly, TDS is applicable on dividend income exceeding ₹10,000. Individuals can submit Form 15G or Form 15H to either reduce or exempt TDS on dividends.
Form 15H and 15G serve as indispensable tools for managing TDS on interest income. It is essential, however, to adhere strictly to the primary requirement of these forms: that the individual's tax liability remains zero to avoid any potential tax evasion issues. Rather than resorting to fraudulent practices to evade taxes, individuals can explore legitimate avenues such as investing in financial instruments.
Under Section 80C of the Income Tax Act of 1961, investments in options like insurance, Fixed Deposits (FDs), and Employees' Provident Fund (EPF) offer opportunities to reduce tax liabilities and foster financial growth legally.
No, filing Form 15G and 15H does not make interest income non-taxable. It only tells the payer not to deduct TDS because your estimated total taxable income for the financial year is below the basic exemption limit and your tax liability is expected to be nil. If your actual total taxable income later exceeds this limit, you must pay tax on it, including on the interest income.
Yes, you should submit Form 15G or 15H at all bank branches where you have a deposit. You can also submit Form 15H for Post Office SCSS to the Post Office branch where you have a Senior Citizen Savings Scheme Account (SCSS). The interest exceeding ₹50,000 per year from SCSS will attract TDS on interest income.
No, the income tax department does not need Form 15G or 15 H. You can simply file your ITR and declare your taxable income there.
No, Forms 15G and 15H are not alternatives to your annual ITR. These forms are mere declarations for the convenience of taxpayers with low incomes. You will still need to file your ITR to complete your tax assessment and claim any refunds on tax paid.
You will need Form 15G while withdrawing from your EPF balance if you fall into the following categories:
You are withdrawing from EPF before completing five years of continuous service
Your withdrawal amount is more than ₹50,000
15G Form: Resident individuals below 60, HUFs and certain other non‑firm / non‑company entities, with total income below the basic exemption limit and nil tax liability.
15H Form: Resident individuals aged 60+ with nil final tax liability (after deductions/rebate), even if the interest itself is high.
You will need Form 15G while withdrawing from your EPF balance if you fall into the following category:
Add all expected incomes for the year (salary, pension, rent, interest, etc.), subtract eligible deductions (like 80C, 80D), apply the correct slab and rebate to check that tax payable is zero before signing the declaration.
The declaration becomes incorrect; you must pay full tax (with interest, if applicable) while filing your ITR, and false declarations can attract penalties/prosecution in serious cases.
Yes. File your ITR, report the interest income and other income, and if your computed tax is less than the TDS deducted, the excess will be refunded by the income tax department.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
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