: For Finance Professionals & Students

Forms 15G & 15H For Tax Savings

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As per Section 194A of the Income Tax Act, 1961, all banks and financial institutions have been mandatorily instructed to deduct TDS on all interest payments exceeding Rs.10000 in any financial year. Thus whenever any customer receives interest more than Rs.10000 from the Bank, then bank have to deduct TDS@ 10% on such Interest Income. If the investor has not furnished his PAN details, the TDS rate will be higher at 20%.

 The Income Tax Department has introduced some changes in the two forms. You now have to give additional information on income from all sources and tax deduction availed of during the financial year. Till now, one only had to declare in the form that one’s income was below the taxable limit and, therefore, the TDS should not be deducted. Now, however, one must also mention the expected taxable income in the financial year. This includes income from all sources, such as salary, interest, rent and capital gains. One can avoid the tax-free income like interest from the PF, the PPF and tax-free bonds.


 Form 15G is to be submitted by individuals below 60 years, HUFs and trusts, etc. and who satisfy both the conditions mentioned below:

 1. First, the estimated taxable income for the financial year should be less than the basic exemption limit i.e.Rs 2 lakh for individuals below 60 years and HUFs,

 2. The second condition, which is applicable only to Form 15G, is that the total interest income from all sources should not exceed the basic exemption limit.


 Form 15H is to be submitted by senior citizens only i.e. those who are above 60 years of age and who satisfy the below mentioned condition:

The estimated taxable income for the financial year should be less than the basic exemption limit i.e. Rs 2.5 lakh for senior citizens, and Rs 5 lakh for very senior citizens above 80 years.

 Interestingly, these forms also require the individual to mention details of other incomes, including dividends from shares and mutual funds. Dividend income is tax-free but the Income Tax Department still wants to know how much you earned from them. “The new forms seem to have been made with all the possible situations in mind.

 Find out whether you are eligible to file Form 15G/15H with this example


Age of Assessee Interest Income


Other Income






Taxable Income


Whether eligible to file Form 15G/15H
55 years 250000 0 100000 150000 NO, 15G can’t be filed as interest Income is above exemption limit.
64 years 180000 180000 100000 260000 No, 15H can’t be filed as Taxable income is above exemption limit.
61 years 255000 90000 100000 245000 Yes, 15H can be filed as Taxable income is below exemption limit.
38 years 90000 170000 100000 160000 Yes, 15G can be filed as both conditions are satisfied.


The Forms 15G and 15H have to be submitted at every branch of the bank where you have a deposit. Though the threshold limit of Rs 10,000 a year is per branch, some banks insist on a form to be submitted even when the interest is less than Rs 10,000 in that branch.

 A bank can track you using the unique customer ID. If the combined interest in all branches is above the Rs 10,000 limit, TDS will be deducted if you have not filled the Form 15G or 15H. It is best to provide the form than risk TDS. Once the tax has been deducted, it can only be reclaimed by filing your income tax return.

The worst affected are investors who are not eligible to file Form 15G because their interest income is above the threshold limit even though their total taxable income is not liable to tax. One option for such people is to allow the banks to deduct the TDS. They can then reclaim the amount by filing their tax returns. This is a cumbersome process and, therefore, not worth undertaking. The second option is to split the fixed deposits across several banks and branches so that the TDS exemption limit is not breached.

 Please Note that Form 15G and Form 15H both have a validity of one financial year only. These forms are valid only for the financial year in which you have furnished these forms. If You want to apply for nil TDS in next year you will have to refurnish these forms.

 However, note that the above strategies are only meant to avoid TDS, not avoid tax or file your tax return. You may be required to file your tax return if your total income before the deductions is above the basic tax exemption limit.

 Besides, there is a stiff penalty for furnishing incorrect information in the form just to avoid the TDS.

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