15G and 15H

In this post, we will take a look at the complete guide to Form 15G and 15H. The topics we will discuss are the following:

What is Form 15G and Form 15H?

The banks in India have to deduct TDS when the interest income of an individual exceeds Rs.10,000 a year. The bank also includes deposits held in all branches to determine this limit. In case an individual’s total income is below the taxable limit, he / she can submit a Form 15G and 15H to the bank. They can request them not to deduct TDS on the interest amount.

Form-15G

Form 15G is a declaration under sub-section (1) and (1A) of section 197A of the Income Tax Act of 1961, to be made by an individual (not being a company or firm) claiming certain receipts without the deduction of tax. The eligibility criteria to submit this form has been listed below:

  • Form 15G can be submitted by individuals below the age of 60 years or by a Hindu Undivided Family (HUF).
  • Form 15G should be submitted before the first payment of interest on a fixed deposit.
  • The individual should submit this form to each bank branch through which the individual is collecting interest.
  • This form can only be submitted by individuals whose tax payable on their total income is zero.
  • The individual should be a resident Indian.
  • The total interest income is less than the minimum exemption amount for that year. The minimum exemption amount for the year 2017-18 is Rs.2,50,000.

Form 15H

Form 15H is a declaration under sub-section (1C) of section 197A of the Income Tax Act, 1961, to be made by an individual of the age of 60 years or more to claim certain receipts without deduction of tax. The eligibility criteria to submit this declaration is listed below:

  • Form 15H can only be submitted by individuals who have attained the age of 60 years at the time of submission.
  • The estimated tax for the previous year should be zero. The individual should not have paid tax in the previous year because his/her income should be below the taxable amount.
  • The individual should submit this form to each bank branch through which the individual is collecting interest.
  • Form 15H should be submitted to the bank before the payment of the first interest. This is not compulsory, but it will prevent the bank from deducting the TDS.
  • Form 15H will need to be submitted to the banks if the interest from one branch exceeds Rs.10,000 a year.
  • Form 15H will require to be submitted if the interest income from any source other than a deposit, such as interest on a loan, advance, debentures, bonds, etc. exceeds Rs.5,000 annually.

Purposes for submitting Form 15G / 15H

Form 15G and 15H are usually submitted to banks to prevent the deduction of TDS on interest. These forms can also be submitted for a few other reasons:

  • TDS on EPF withdrawal – There is a deduction of TDS on EPF if an individual withdraws their EPF before completion of 5 years of continuous service. If an individual has an EPF balance of more than Rs.50,000 and wishes to withdraw it before completion of 5 years of continuous service, then he/she may submit a Form 15G / 15H.
  • TDS on income generated from corporate bonds – An individual is eligible for a deduction of TDS from corporate bonds if the income generated from them exceeds Rs.5,000.
  • Tax deducted at source (TDS) on income from post office deposits – Digitized post offices also deduct TDS and will accept Form 15G / 15H if the individual meets the eligibility criteria.
  • TDS on rent – There is a deduction of TDS on rent if the total rental payment for a year exceeds Rs.1.8 lakhs. If the individual’s total income is nil, he / she can submit Form 15G / 15H to request the tenant to not deduct TDS.
  • TDS on Insurance Commission – TDS is deducted from insurance commission if it exceeds Rs 15000 per financial year. But with effect from 01.06.2017 insurance agents can submit Form 15G/15H for non-deduction TDS. They can do this if the tax on their total income is nil.

Things to keep in mind

  • An individual can only submit Form 15G and 15H to a bank with a valid PAN, failing to which, the tax will be deducted @ 20%. It is advisable to submit a copy of the PAN card with the cover letter.
  • The individual should make sure he / she receives an acknowledgment while submitting Form 15G / 15H. Acknowledgment of submission of Form 15G / 15H details is useful if a dispute with the bank arises.
  • As per the revised form, the individual will need to submit the details of the Form 15G / 15H submitted by him / her to other banks as well as the interest income amount mentioned in these forms.
  • As the individual has submitted his / her PAN, the respective assessing officer will have access to all the information submitted by the individual to other banks and will be able to detect any incorrect information submitted by the individual.
  • Indian law has a provision for imprisonment for a minimum of three months if an individual is found to have provided incorrect information in these declaration forms.
  • Some banks allow these forms to be submitted online through the bank’s website and some collect in paper format. Later, they convert it into electronic format.
  • Form 15G / 15H is valid for one financial year. So you have to submit these forms every year if you are eligible. Submitting them as soon as the financial year starts will ensure the banks don’t deduct any TDS on your interest income.

Acknowledgment of submission

The Deductor, after due verification of the self-declaration, has to assign a unique identification number (UIN) to the declaration.

The unique identification number (UIN) allotted to the declaration has to contain the following fields: 

  • A sequence number as shown in the table;
  • the financial year for which the declaration is being provided and TAN of the Deductor.
15G 15H
10 alphanumeric character starting with
G followed by 9 digits (Eg. G000000001)
10 alphanumeric character starting with
H followed by 9 digits (Eg. H000000001)

The UIN running sequence number series would be reset to 1 at the start of each FY, in case of each TAN of the deductor.

The sequence number must be a ten digit alphanumeric string of characters, starting with G or H for Form 15G and 15H respectively.

Steps to be followed by the deductor

The deductor will have to digitize the declaration given on paper and upload all the declarations. Also, including the electronic declarations on the department website. These declarations are to the uploaded quarterly by the deductor.

The Deductor has to quote the UIN in quarterly Statement. It has to be against the transaction which is covered under Form 15G / 15H declaration.

It is also mandatory to quote the same in the “Certificate Number” field for the Form26Q return statement. Also, where the Deduction remark is set to “NO DEDUCTION U/S 197A”.

This is applicable to statements which pertain to the Financial Year 2015-16, Quarter 3 onwards.

Due dates for filing Form 15G and 15H returns

The following table gives a clear indication of the due dates for declarations received from 1st April 2016 onwards:

Date of ending of the quarter of the FY Due Date
30th June – 1st Quarter 15th July
30th September – 2nd Quarter 15th October
31st December – 3rd Quarter 15th January
31st March – 4th Quarter 30th April

This ends our post. If you have any questions kindly drop them in the comment section below.

Related:

Share On:

Leave a Reply