By Priyanka Sambhav
Form 15G and 15H saves you from TDS deduction by banks on your interest income if your income is below the taxable limit. Banks have to deduct a TDS of 10% on the interest income when it crosses the level of Rs 40,000 in a year. Form 15 G is for everybody below the age of 60, and Form 15H is for senior citizens.
If Mr Ganguly is of 65 years and he earns an interest income of Rs 1.5 lakh and receives Rs 1 lakh as his pension. His total income adds up to Rs 2.5 lakh. Given the fact that he is a senior citizen, his basic exemption limit is Rs 3 lakh. His income tax is nil as its lower than the exemption limit. So Mr Ganguly can fill form 15 H and be relieved of any TDS worries. Similarly, a person who has not crossed the age of 60, has no income tax liability can benefit by filling form 15H.
Here are seven things to help you to understand form 15 G and 5H-
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One can submit Form 15G and Form 15H to prevent TDS deduction on interest income if income tax payable is ‘nil’.
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You must have a PAN for claiming the benefit.
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Form 15H is for senior citizens, those who are 60 years or older; while Form 15G is for everybody else.
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Form 15G and Form 15H have validity only for the given financial year.
Hence you need to submit this every year at the beginning of the financial year.
5. If you forget to submit the form on time and your bank deducts the TDS, then you can file the income tax return to claim the refund of excess TDS.
6. You need to submit the form15g/15H at each branch of the bank if your deposit is in multiple bank branches.
7. You don’t submit these forms directly to the income tax department. Just submit them to the bank, and they will prepare and submit these forms to the income tax department.
When will you fill Form 15G/15 H?
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Dividends of Mutual Funds
Dividends are now taxable in the hands of the investor from 1st April 2020. The dividends received more than Rs 5000 will attract a TDS of 10%. However, it was brought to 7.5% as COVID-19 relief in May 2020. TDS is applicable for all dividend options- payout, reinvestment or even on transfer plans. But if your income tax is nil after considering all your income in an FY, you can submit these form to avoid TDS deduction. You have to submit the form on the mutual fund website or the registrar and transfer agent’s (RTA) website. You can fill out the form and submit it in paper form too.
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EPF Withdrawal
Form15G/H will help you in saving TDS deduction on EPF withdrawal as well. TDS is deducted on EPF balances if withdrawn before 5 years of continuous service. If you have had less than 5 years of service and plan to withdraw your EPF balance which is more than Rs 50,000, you can submit Form 15G/Form15H. However, you will be eligible only if the tax on your total income, including EPF balance withdrawn, should be nil.
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Post Office deposit
Even post office deposit scheme deducts TDS so form15G/15H can be pf help if your taxable income is nil.
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Rent
The TDS threshold for the deduction of TDS on rent is Rs 2.4 lakh under section 194I of the Finance Act. But you can submit Form 15G or Form 15H to request the tenant not to deduct TDS if the tax on your total income is nil.
