The person who has a fixed deposit must mandatory submit the Form 15G and Form 15H in the appropriate financial institution such as a bank at the starting of the fiscal year. The person submits it so that TDS is not applied to the interest income that has been earned. There are still many taxpayers who have no idea that they can submit the Form 15G / Form 15H by Gen TDS software even if the income is more than Rs 2.5 lakh but with conditions. Read below to know more about it.
Who has the Right to Submit the Form 15G/Form 15H?
The taxpayer must mandatory submit the Form 15G or Form 15H in the appropriate financial entity most probably banks for not indulging in the cut down of tax. The TDS is deducted if the interest income on FDs becomes more than the threshold limit.
The person whose age is less than 60 years as per the documents can submit Form 15G. The person whose age is 60 years and above it (i.e senior and super senior citizens), as per the documents, can submit the Form 15H.
“Form 15G or 15H is required to be filed only by persons who have fixed deposits with a bank in India and fulfil the eligibility conditions. The Form 15G will be filed by those with age less than 60 years, while the form 15H to be filed by those with age more or equal to 60 years,” says Amit Gupta, Founder & CEO, saginfotech.com.
Note: Gross total income is the income that you get from all sources. Net taxable income means that income is from your gross total income, by removing all the tax deductions applied to you.
As per the Interim Budget 2019, the person whose calculation of taxable income is up to Rs 5 lakh in an FY can take the advantage of full tax rebate and will not have to pay any tax.
What About the Person Whose Taxable Income is more than INR 5 lakh?
“Even if the gross total income of a person exceeds Rs 5 lakh and he/she intends to reduce it to Rs 5 lakh or a little less by way of claiming eligible deductions, he/she is eligible to submit Form 15G/Form 15H,” said Shalini Jain, Partner, People Advisory Services, EY India. Do keep in mind that while submitting the form to avoid deduction of tax, your income should not exceed the basic tax exemption. For a resident individual whose age is below 60 years, the basic exemption limit is Rs 2.5 lakh.
“In order to submit the form one has to fulfil the eligibility criteria as mentioned in Section 197A (1B) of the Income Tax Act, 1961. The eligibility criteria suggest that an individual can submit the form only if the income for which the form is being submitted does not exceed the basic exemption limit applicable to him/her” said Jain.
She also said “Suppose you wish to submit Form 15G for fixed deposit interest income earned from the bank. This form can be submitted by you only if your interest income does not exceed the tax-exemption level, i.e., your aggregate interest income should not exceed Rs 2.5 lakh in a financial year.”
Consider that the total income from the salary of a person is Rs 3.5 lakh, and bank A contains Rs 30,000 interest from FD while bank B contains Rs 20,000. The same person has also made Rs 50,000 PPF investment in which he can break the tax under section 80C.
| Entities | Total Amt (Rs) |
| Income from Salary | 3.5 lakh |
| Interest from FD A | 30,000 |
| Interest from FD B | 20,000 |
| Gross income | 4 lakh |
| PPF Deduction | 50,000 |
| Taxable income | 3.5 lakh |
From the above-mentioned example, we can see that the net tax liability of the person is zero while the total interest income is not more than Rs 2.5 lakh. Hence, Form 15G can be submitted by the person.
Eligibility Conditions for Senior Citizens
For the senior citizens i.e. above 60 years but below 80 years, if the income is not more than the basic exemption limit then the condition will not be applied. “The condition of income not exceeding the basic exemption limit is applicable for individuals only who are eligible for submitting Form 15G and not for the individuals submitting Form 15H,” said Soni.
For the fiscal year 2019-20, the basic tax-exempt income level for senior citizens (between 0 and 80 years) and super senior citizens (80 years and above) are Rs 3 lakh and Rs 5 lakh respectively.
Jain further added, “The form applicable to senior citizens, i.e., Form 15H is governed by Section 197A (1C) of the Income Tax Act. As per the notes to the form, Form 15H can be filed by a senior citizen even if the income for which exemption is being claimed exceeds the basic exemption limit (i.e., Rs 3 lakh or Rs 5 lakh, as applicable). However, the net income after claiming all the deductions as applicable should be below the applicable exemption limit. The payer of income (usually banks) needs to verify that the tax liability on total income should be nil.”
So, Form 15H can be submitted by the senior and super senior citizens even in the case if tax cut down has been avoided on the income and is more than the basic exemption limit as per the condition mentioned above.
Gupta says, “In case there is a change in circumstances and some tax is payable, taxpayers must immediately intimate the payer about it and withdraw their form 15G/H.”
Note: that the non-resident Indians cannot submit the Form 15G/Form 15H.
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