Understanding Form 15G and Form 15H: A Comprehensive Guide

Form 15G and Form 15H are forms provided by the Income Tax Department of India that are used to declare that your income is below the taxable limit and hence no TDS (Tax Deducted at Source) should be deducted on it. These forms are especially useful for individuals, such as students and retirees, whose income is below the taxable limit and who wish to avoid the deduction of TDS on their income.

Form 15G is meant for individuals who are below 60 years of age, while Form 15H is for senior citizens, i.e., individuals who are 60 years of age or older.

Eligibility Criteria

Form 15G

• The individual’s age should not exceed 60 years.
• The tax calculated on the total income for the financial year should be nil.
• The total interest income for the financial year should not exceed the basic exemption limit (which is currently Rs 2.5 lakhs for individuals below 60 years of age).

Form 15H

• The individual should be 60 years of age or older.
• The tax calculated on the total income for the financial year should be nil.

Purpose of Form 15G and Form 15H

These forms are primarily used to avoid TDS on the following types of income:

• Interest Income: Interest earned on fixed deposits, recurring deposits, and other types of deposits in banks, post offices, and other financial institutions.
• EPF Withdrawals: Withdrawals from Employees' Provident Fund (EPF) before the completion of five years of continuous service.
• Post Office Savings: Interest earned from post office savings accounts.
• Corporate Bonds: Interest income from corporate bonds.
• Insurance Commission: Income earned as commission from insurance policies.

Key Points to Remember

1. Submission to the Right Entity: Form 15G and Form 15H should be submitted to the entity that is responsible for deducting TDS. For example, if you have a Fixed Deposit in a bank, you need to submit the form to the bank.
2. Timely Submission: It's essential to submit these forms at the beginning of the financial year for which it is being filed. This helps in ensuring that TDS is not deducted from the start of the financial year.
3. Validity Period: Both Form 15G and Form 15H are valid for one financial year. Hence, it needs to be furnished for each financial year in which the individual meets the eligibility criteria.
4. Penalties for Providing False Information: Individuals need to provide true and accurate information in these forms. Providing false information can lead to penalties under the Income Tax Act.

Process for Submitting Form 15G and Form 15H

1. Obtain the Form: The forms are available on the Income Tax Department’s website as well as from the entity responsible for deducting the TDS.
2. Fill in the Details: The form requires details such as name, PAN (Permanent Account Number), residential address, income details, and declaration that the tax on the total income is nil.
3. Submission: Once the form is filled, it should be submitted to the respective entities such as banks, post office, or any other institution responsible for deducting TDS.

In conclusion, Form 15G and Form 15H are essential tools for individuals with income below the taxable limit to avoid the deduction of TDS on their income. By understanding the eligibility criteria and the process for submitting these forms, individuals can effectively manage their TDS obligations and ensure compliance with the Income Tax regulations.

Leave a reply