Form 15G is a self-declaration form that helps individuals avoid TDS (Tax Deducted at Source) deductions on interest income if their total taxable income is below the exemption limit. It is primarily meant for taxpayers whose tax liability is nil.
This guide provides everything you need to know about Form 15G, including its purpose, eligibility, how to fill it, and key things to remember.
What is Form 15G?
Form 15G is designed to ensure taxpayers, whose income is below the taxable limit, are not burdened by TDS deductions on their interest earnings.
Typically, banks and other financial institutions deduct TDS if the interest income exceeds a certain threshold. Filing Form 15G at the beginning of the financial year with the respective deductor ensures that no TDS is deducted on your interest income.
While Form 15G is applicable for individuals below 60 years, Form 15H is its counterpart for senior citizens (60 years and above).
Who is Eligible to Submit Form 15G?
To be eligible for filing Form 15G, an individual must meet the following criteria:
Residency: Must be a resident of India.
Type of Taxpayer: Can be an individual, HUF (Hindu Undivided Family), or a trust; companies and firms are not eligible.
Age: Below 60 years.
Tax Liability: The total tax liability on income should be nil.
Interest Income: The interest income must be below the basic exemption limit (₹2.5 lakh for FY 2023-24).
When to Use Form 15G
Form 15G can be used in various scenarios to prevent TDS deduction, such as:
Fixed Deposit Interest: Submit the form to banks and financial institutions to avoid TDS if the interest income is below the taxable limit.
Post Office Savings: Avoid TDS on interest earned from post office deposits.
Rent: If annual rent exceeds ₹2.4 lakh, Form 15G can prevent TDS if your taxable income is nil.
Insurance Commission: Applicable for insurance agents earning commissions exceeding ₹15,000 in a financial year.
Provident Fund (PF) Withdrawal: Prevent TDS on EPF withdrawal (if withdrawing before 5 years of service and amount exceeds ₹50,000).
Corporate Bonds: For interest income exceeding ₹5,000 from corporate bonds.
How to Fill Form 15G
Filling Form 15G correctly is crucial to avoid any rejection or penalties. The form consists of two parts:
Part 1: To be completed by the taxpayer.
Part 2: To be filled by the deductor (e.g., bank or financial institution).
Key Details Required in Part 1:
Personal Information: Name, PAN, address, email, phone number, and residential status.
Tax Details:
Whether assessed to tax in earlier years (Yes/No).
Latest assessment year if taxable income exceeded exemption limit.
Income Details:
Estimated income for which declaration is made.
Total estimated income for the financial year.
Declaration: Include details of other Form 15G submissions, income source, and relevant investment account.
Once completed, the taxpayer must sign the form and submit it to the deductor.
Forgot to Submit Form 15G?
If you forget to submit Form 15G before the TDS deduction, the deductor cannot refund the TDS. Instead, you can:
Check your Form 26AS to see the TDS details.
File an income tax return (ITR) to claim a refund for the excess TDS deducted.
How to Submit Form 15G Online
Most banks and financial institutions allow online submission of Form 15G through internet banking.
Steps:
Log in to your bank's net banking portal.
Navigate to the "Tax Services" or "TDS" section.
Select "Form 15G/H" and fill in the required details.
Submit the form and retain the acknowledgment for future reference.
Difference Between Form 15G and Form 15H
Criteria | Form 15G | Form 15H |
Eligibility | Individuals below 60 years of age. | Senior citizens (60 years and above). |
Taxpayer Type | Individuals, HUFs, and trusts. | Individual taxpayers only. |
Interest Income Limit | Must be below basic exemption limit. | No such restriction. |
Penalty for False Declaration
Filing a false declaration in Form 15G to avoid TDS can lead to penalties under Section 277 of the Income Tax Act, including:
Imprisonment (6 months to 7 years) and a fine if the tax evasion exceeds ₹25,000.
Imprisonment (3 months to 2 years) and a fine in other cases.
Important Points to Remember
Always provide a valid PAN. Failure to do so may result in TDS at 20%.
Retain an acknowledgment of submission for disputes.
Ensure the information matches your income tax records.
Inform the deductor if your income becomes taxable after submitting Form 15G.
Conclusion
Form 15G is essential for individuals with no taxable income to avoid unnecessary TDS deductions. Ensure eligibility before filing and provide accurate information to prevent penalties or complications. Form 15H serves the same purpose for senior citizens, tailored to their income and age.
Filing Form 15G on time simplifies your tax process and avoids the hassle of claiming refunds.
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