With the exemption of incomes which do not go beyond Rs.2.5 lakh per annum, every individual must pay income tax. Typically salaried individuals have tax deducted at source (TDS) by their employer, or relevant financial institutions in case of investments or savings.

Under Section 194A of Income Tax Act, TDS is applicable at a rate of 10% on interest earned through different types of investments like fixed deposits. Consequently, financial institutions deduct TDS at the given rate, though interest amounts below Rs.40,000 are exempted from these deductions.

Form 15G and Form 15H under Section 197A allows individuals who are not liable to pay income tax to avail the exemption by preventing TDS deductions.

It is vital for individuals earning interest on investments or savings, from financial institutions, to understand the relevance and eligibility criteria of these forms. Especially in case of high return investments like fixed deposits, availing the benefits of filing the relevant form can save a lot of money for investors.

Eligibility for Form 15G and 15H

The specific eligibility criteria for each of these forms must be understood since filing the wrong document can lead to penalties. Before investors go on to calculate their savings with an FD calculator or similar tools for other earnings, it is essential to understand the eligibility criteria for both 15G/H.

The criteria for Form 15G are listed below –

  • Must be an Indian citizen.

  • Applicant should be below 60 years of age.

  • Individuals with no income tax liability as per income tax slabs.

  • Submission to be completed before first interest payout.

  • The form should be submitted to every financial institution and their branches from which this individual is earning interest.

Additionally, individuals from Hindu Undivided Families are also eligible to file for an exemption from TDS by filing form 15G.

The eligibility criteria to file Form 15H are listed below –

  • Applicant should be above 60 years of age.

  • Senior citizens who do not have to pay any income tax.

  • It must be submitted before deduction from the first interest by the relevant financial institution.

  • Has to be an Indian citizen.

  • Form 15H must be submitted to every branch of the financial institutions from where the senior citizen is earning interest.

Any individual who fits either of the eligibility criteria listed above should file the same to save tax. They must produce their PAN while filing either of these two forms. Any investor or earner considering to avail the benefits of Form 15G and 15H for fixed deposits and other investments should check the relevant tax slabs at that point of time.

How to apply for these forms?

The application procedure for both Form 15G and 15H is quite simple especially with the availability of an online application. Eligible individuals can follow the steps discussed below to apply for exemption from TDS on their income from interests. Though the process might vary across different financial institutions, the basic method is very similar to each other.

  1. Investors should visit the official portal of the relevant financial institution and log on to their personal account using customer ID.

  2. After logging in, they should select the tax section mentioned on the portal.

  3. Depending on the age and other eligibility criteria, individuals should select either Form 15G or 15H.

  4. All relevant details should be filled in and double-checked. As mentioned earlier, the wrong filing of these forms can lead to severe penalty charges since tax evasion is punishable by law.

  5. After submission, the acknowledgement receipt should be downloaded and saved.

  6. Generally, a service request number is generated by the financial institution. This number must be saved for future use.

After filing either of these forms, financial institutions check relevant details and also issue a UIN (Unique Identification Number). This should also be preserved by earners.

There are numerous hacks to help individuals save money and make money at once, like Bajaj Finance FD and other investment schemes. These can steadily reap heavy benefits for investors.

Consequently, it is essential for investors to understand all the relevant details before investing in them. This also includes using tools like an FD calculator and others to assess the precise returns on their earnings. Exemptions, as well as deductions, should be noted carefully before going on to invest.