How to Fill Form 15G and 15H: A Step-by-Step Guide to Avoid TDS Deductions

he Central Board of Direct Taxes (CBDT) has introduced a new format and procedure for filing Form 15G and Form 15H, effective from October 1, 2015. These forms are essential for taxpayers who want to avoid Tax Deducted at Source (TDS) on certain types of income.

Who Should File Form 15G and Form 15H?

Taxpayers seeking exemption from TDS on specific incomes must file a self-declaration using Form 15G or Form 15H, in accordance with Section 197A of the Income-tax Act, 1961. Form 15G is for individuals below 60 years of age, while Form 15H is for senior citizens aged 60 and above.

Online Submission of Form 15G and 15H

Many banks now offer the option to submit Form 15G and Form 15H online through their internet banking portals. This convenient option allows you to file the forms without visiting the bank.

Step-by-Step Guide to Filling Out Form 15G

Form 15G consists of two parts:

Part 1: This section is to be filled out by the individual seeking exemption from TDS. Here’s a breakdown of the required information:

1. Name: Enter your full name as it appears on official documents.
2. PAN: Your Permanent Account Number is crucial; the form will be invalid without it.
3. Status: Specify your status as an individual or another eligible entity.
4. Financial Year: Indicate the financial year for which the income pertains.
5. Residential Status: Select whether you are a resident Indian or an NRI.
6. Address & Contact Details: Provide your complete address and contact information.
7. Tax Assessment Details: If you have been assessed for tax in any of the six years preceding the current financial year, mention it here.
8. Estimated Income: Enter the estimated income for which you are filing the declaration.
9. Total Estimated Income: Include all your estimated income for the current financial year.
10. Previous Declarations: If you have submitted Form 15G earlier in the financial year, provide the details.
11. Income Details: Specify the income source, such as the account number for fixed deposits or insurance policy numbers.

After filling out the form, verify, sign, and submit it.

Part 2: This section is completed by the institution or person responsible for paying the income, such as a bank paying interest on a fixed deposit.

Step-by-Step Guide to Filling Out Form 15H

Form 15H is similar to Form 15G but is designed for senior citizens. The primary difference is that senior citizens must provide their date of birth in addition to the other details required in Form 15G.

Recent Updates to Form 15G and 15H

As of June 1, 2016, rental income can also be declared using Form 15G or 15H. The types of income that can be included in these forms now include:

• EPF withdrawals
• Dividend income
• Interest income (excluding interest on securities)
• Life insurance payouts
• National Savings Scheme payouts
• Rental income

Understanding Tax Deducted at Source (TDS)

TDS is a method by which the Income Tax Department collects tax directly at the source of income. For instance, if you earn interest on a fixed deposit exceeding ₹10,000 in a financial year, the bank will deduct 10% as TDS before crediting the interest to your account. However, if your total income is below the taxable limit, you can avoid this deduction by filing Form 15G or Form 15H.

Common Misconceptions About TDS

Myth 1: No TDS Means No Tax Liability

This is incorrect. Just because TDS is not deducted doesn’t mean the income is tax-free. For example, withdrawing EPF before completing five years of service may not attract TDS, but the withdrawal is still taxable.

Myth 2: TDS Covers Your Entire Tax Liability

This is another misconception. TDS might not cover your entire tax liability, especially if you have other sources of income. You may need to pay additional taxes or claim refunds based on your total income.

When and How to Submit Form 15G and 15H

You should submit Form 15G or 15H to your income provider at the beginning of the financial year or before the first income payment is due. If your estimated income changes during the year, you must submit a new form. Additionally, if you open multiple fixed deposits or receive income from different entities, you need to submit these forms to each income provider separately.

Checking Your TDS Status

It’s important to regularly check your TDS status by logging into the Income Tax e-filing portal and reviewing your Form 26AS. This form provides a summary of the TDS credited to your account. Ensure that the details match those on your Form 16 or salary slips.

Conclusion

Understanding and correctly filing Form 15G or 15H can help you avoid unnecessary TDS deductions. Ensure you meet the eligibility criteria before filing these forms, and regularly check your TDS status to avoid any discrepancies.

For more detailed information and personalized assistance, feel free to reach out or leave your comments below. Keep yourself informed to make the best financial decisions.

Frequently Asked Questions (FAQs) About Form 15G and 15H

1. What is the purpose of Form 15G and Form 15H?

• Form 15G and Form 15H are self-declaration forms that allow taxpayers to request their income providers not to deduct TDS (Tax Deducted at Source) from their income. Form 15G is for individuals below 60 years of age, while Form 15H is for senior citizens aged 60 and above.

2. Who is eligible to submit Form 15G?

• Any resident Indian (individual or HUF) below 60 years of age can submit Form 15G if their total income, including the income for which they are filing the form, is below the basic exemption limit (₹2.5 lakh for FY 2023-24).

3. Who is eligible to submit Form 15H?

• Resident Indians aged 60 years or older during the financial year can submit Form 15H if their total taxable income, after claiming deductions, is below the basic exemption limit.

4. Can NRIs submit Form 15G or 15H?

• No, Form 15G and Form 15H can only be submitted by resident Indians. NRIs are not eligible to file these forms.

5. When should Form 15G/15H be submitted?

• These forms should be submitted at the beginning of the financial year or before the first income payment is due. If your income situation changes during the year, requiring a new form, you should submit the updated form as soon as possible.

6. Do I need to submit Form 15G/15H every year?

• Yes, you need to submit a new Form 15G or 15H every financial year to continue claiming the exemption from TDS.

7. Can I submit Form 15G/15H for multiple fixed deposits with the same bank?

• Yes, if you have multiple fixed deposits with the same bank, you must submit the forms separately for each deposit, especially if they are opened at different times during the financial year.

8. What happens if I do not submit Form 15G/15H on time?

• If you fail to submit these forms on time, your income provider may deduct TDS from your income. You can still claim a refund for the deducted TDS by filing your income tax return.

9. Is there a penalty for submitting false information in Form 15G/15H?

• Yes, submitting false information in Form 15G or 15H can attract penalties, including a fine or imprisonment of up to 2 years under Section 277 of the Income Tax Act.

10. What types of income can be declared using Form 15G/15H?

• Income that can be declared includes interest on fixed deposits, recurring deposits, EPF withdrawals, dividend income, life insurance payouts, and rental income, among others.

11. Can I file Form 15G/15H online?

• Yes, many banks offer the facility to file Form 15G and Form 15H online through their internet banking portals. This makes the process more convenient and accessible.

12. Do I need to file Form 15G/15H with each income provider separately?

• Yes, you need to file these forms with each income provider separately, such as different banks or institutions from which you receive income.

13. What if my total income exceeds the taxable limit after submitting Form 15G/15H?

• If your income exceeds the taxable limit after submitting the forms, you should immediately file an updated Form 15G or 15H with your income providers to avoid penalties. Additionally, you will need to pay the applicable taxes.

14. How can I check if TDS has been deducted from my income?

• You can check if TDS has been deducted from your income by logging into the Income Tax e-filing portal and reviewing your Form 26AS. This form provides a detailed summary of all TDS credited to your account.

15. What should I do if there’s a mismatch between Form 16 and Form 26AS?

• If there is a discrepancy between the TDS details in your Form 16 and Form 26AS, you should contact your employer or the income provider to correct the information. You can also file your income tax return based on the correct details and mention the discrepancy in your ITR.

16. What are the consequences of not depositing TDS deducted by an employer?

• If an employer deducts TDS but fails to deposit it with the government, the employer is liable for the penalty. However, the employee must report the discrepancy in their tax return to avoid any legal issues.

17. Is Form 15G/15H mandatory if my income is below the taxable limit?

• While not mandatory, submitting Form 15G/15H ensures that TDS is not deducted from your income, thus avoiding the need to claim a refund later.

18. Can I claim a refund if TDS was deducted despite submitting Form 15G/15H?

• Yes, if TDS was deducted even after submitting Form 15G or 15H, you can claim a refund by filing your income tax return.

Disclaimer: This article is for informational purposes only and not intended as legal, tax, or financial advice. Please consult a professional for specific guidance.