Among taxpayers in India, one of the most frequently asked questions is, What is Form 15G?
If your objective is to save on income taxes and to ensure that no unnecessary deductions take place, it’s essential to know the concept of TDS on interest earned, which will help you to understand what is Form 15G and its advantages.
In this article, we will share what is Form 15G, and what is Form 15H, which is another way to save on taxes.
We will also share the 15G Form Format, Eligibility for Form 15G, and the benefits associated with them.
But first, let’s understand the concept behind TDS or Tax Deducted At Source on interest, which forms the basis for filing Form 15G and Form 15H.
TDS On Interest Earned Can Be Saved
The first step in understanding What is 15h Form is understanding the concept of Tax Deducted at Source on interest earned.
Banks are required by law to cut TDS on the interest earned by an individual, if the total interest earned is more than 40,000 in a year. This interest can be earned on fixed deposits, rent received, insurance commission, provident fund withdrawal, and more. Earlier, till FY2019, this limit was Rs 10,000, which has now been extended to Rs 40,000.
Now, what if your income is less than the taxable threshold?
In that case, you can ask for a waiver on the TDS cut on the interest earned, and this is a provision offered by the Income Tax Department.
However, to claim a waiver on the TDS, you will need to file a declaration in case your taxable income is less. And this declaration is Form 15G.
What Is Form 15G And 15H?
Form 15G is a declaration provided to the Income-tax department that your total annual income is less than the tax threshold; hence, there should be no TDS cut on your interest earned in that year.
Form 15G is a declaration under sub-section (1) and (1A) of section 197A of the Income-tax Act, 1961.
If your interest earned in a year is more than Rs 40,000, and your taxable income is less, then filing Form 15G and 15H are highly recommended by experts. This can save you a considerable amount of tax, which is deducted at the source by banks, as per Govt norms.
Note here that banks calculate the interest earned by you across all deposits across all its branches. Hence, don’t ignore Form 15G, if your interest earned via one source is less. Calculate your total interest earned across all the branches of a bank and all the other sources.
What Is Form 15H?
While Form 15G is for everyone under age 60, Form 15H is only for senior citizens who are aged 60 and more. This is a declaration under sub-section (1C) of section 197A of the Income-tax Act, 1961.
The purpose and objective of both Form 15G and 15H are the same: Save TDS on your interest earned.
Who Can File Form 15G & Form 15H?
While understanding what is 15h form, it’s also necessary to know the eligibility criteria: This means, before filing form 15G and 15H, you should meet these conditions:
- Companies are not allowed to file form 15H or 15G. Only individuals and HUF (Hindu Undivided Family) or trust can file Form 15G declaration to save TDS on interest. And only individual senior citizens above 60 years can file form 15H.
- Only resident Indians can file this form.
- 15G should be filed by Indian citizens who are less than 60 years.
- 15H should be filed by Indian citizens who are more than 60 years.
- Total income from the interest earned should be less than Rs 2.5 lakh (this basic exemption limit keeps on changing. For FY2020-21, Rs 2.5 lakh is the limit).
- For senior citizens who are filing Form 15H, the total tax calculated on the total income should be zero. It’s an essential eligibility criterion, and often the declaration gets rejected due to this.
- PAN Card is mandatory for filing both Form 15G and Form 15H.
15g Form Format And How To File Form 15G Online
15G form format, along with form 15H format, is available to download from the Income Tax Department website, and you can file both online.
You can file both of these forms online via your bank’s internet banking platform or the income tax department website.
For filing these forms at the income tax department website, the applicant must have a valid TAN and should be registered as a Tax Deductor & Collector at the income tax website.
As per the Central Board of Direct Taxes (CBDT) rules, the Tax Deductor should have a UIN (Unique Identification Number) attached, for every self-declaration made, for every year.
While filing these forms at the bank’s website, via your internet banking account, the filing is usually done at the section where details about the fixed deposits are provided. Form 15G and Form 15H can be downloaded from the same section.
Penalty For Filing Wrong Form 15G and Form 15H
To stop fraud, Govt of India has imposed strict penalties for those abusing the system by filing false and wrong information under Form 15G and 15H.
If income tax of more than Rs 1 lakh is evaded via the wrong filing of these forms, then there is a provision of imprisonment from 6 months to 7 years.
For others, imprisonment between 3 months to 3 years is provisioned.
Still, have doubts and queries on what is Form 15G and 15H? Wish to consult with Tax experts before filing these forms?
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