Form 15G is a declaration form that is used to save tax deducted at source (TDS) on interest income. It is applicable for individuals who have earned interest on fixed deposits, recurring deposits, or any other savings scheme. The form is essential for individuals who do not have taxable income and want to avoid TDS on their interest income. In this blog, we will discuss the eligibility, procedure, and benefits of Form 15G.
Eligibility for Form 15G:
To be eligible for Form 15G, an individual must meet the following conditions:
- The individual should be a resident Indian.
- The individual should be an individual or a Hindu Undivided Family (HUF).
- The individual should be less than 60 years old.
- The individual’s total income for the financial year should be below the taxable limit.
- The interest income earned should be from a savings scheme, such as fixed deposits, recurring deposits, or any other scheme.
Procedure for filling Form 15G:
The following steps should be followed while filling Form 15G:
Step 1: Download or Obtain the Form
The first step is to obtain Form 15G from the Income Tax Department website or obtain a physical copy from a bank or post office.
Step 2: Fill in Personal Details
The second step is to fill in the personal details, such as name, address, and PAN number. It is important to ensure that the details provided are accurate and match the PAN card.
Step 3: Mention Previous Year’s Income
The third step is to mention the previous year’s income, which includes all sources of income earned in the previous financial year. It is important to provide accurate details as incorrect information can lead to penalties.
Step 4: Estimate Current Year’s Income
The fourth step is to estimate the current year’s income from all sources, including the savings scheme. It is important to ensure that the estimated income is below the taxable limit to be eligible for Form 15G.
Step 5: Provide Savings Scheme Details
The fifth step is to provide details of the savings scheme, such as the name of the bank, the branch, and the account number. It is important to provide accurate details to avoid any errors in the form.
Step 6: Mention Nature of Income and Interest Earned
The sixth step is to mention the nature of the income earned from the savings scheme, such as interest income from fixed deposits, recurring deposits, or any other scheme. It is also important to mention the amount of interest received from the savings scheme.
Step 7: Sign and Submit the Form
The final step is to sign the form and submit it to the bank or post office where the savings scheme is held. It is important to ensure that the form is submitted well in advance to avoid any delays in the processing of the form.
Benefits of Form 15G:
The following are the benefits of Form 15G:
- The form helps individuals who do not have taxable income to avoid TDS on their interest income.
- The form can be used to avoid TDS on interest income up to a certain limit.
- The form reduces the burden of tax compliance for individuals who do not have taxable income.
- The form helps in improving the cash flow of individuals by reducing the TDS on their interest income.
Common Mistakes to Avoid While Filling Form 15G
Form 15G is an important document for individuals who want to avoid TDS on their interest income. However, incorrect or incomplete information in the form can lead to penalties and prosecution under the Income Tax Act. In this blog, we will discuss some common mistakes to avoid while filling Form 15G.
Mistake 1: Providing Incorrect Personal Details
One of the common mistakes while filling Form 15G is providing incorrect personal details, such as name, address, or PAN number. It is important to ensure that the details provided match the PAN card and are accurate.
Mistake 2: Not Mentioning Previous Year’s Income
Not mentioning the previous year’s income is another common mistake while filling Form 15G. It is important to provide accurate details of all sources of income earned in the previous financial year.
Mistake 3: Overestimating Current Year’s Income
Overestimating the current year’s income is another common mistake while filling Form 15G. It is important to ensure that the estimated income is below the taxable limit to be eligible for Form 15G.
Mistake 4: Providing Incorrect Savings Scheme Details
Providing incorrect details of the savings scheme, such as the name of the bank, the branch, or the account number, is another common mistake. It is important to provide accurate details to avoid any errors in the form.
Mistake 5: Not Signing the Form
Not signing the form is another common mistake while filling Form 15G. It is important to sign the form as it serves as an affidavit stating that the information provided in the form is true and accurate.
Mistake 6: Not Filling the Form in Block Letters
Not filling the form in block letters is another common mistake while filling Form 15G. It is important to ensure that the form is filled in block letters to avoid any errors in the form.
Conclusion
Form 15G is a useful tool for individuals who do not have taxable income and want to avoid TDS on their interest income. The eligibility, procedure, and benefits of the form have been discussed in this blog. It is important to ensure that the form is filled correctly and submitted to the bank or post office where the savings scheme is held. By doing so, individuals can avoid unnecessary TDS and improve their cash flow.
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Frequently Asked Questions (FAQ’s)
Q1.) What is Form 15G?
Form 15G is a self-declaration form that can be submitted by an individual to their bank or post office to avoid tax deduction at source (TDS) on interest income earned from various savings schemes.
Q2.) Who can fill Form 15G?
Individuals who have taxable income below the basic exemption limit and want to avoid TDS on their interest income can fill Form 15G.
Q3.) What is the basic exemption limit for filling Form 15G?
The basic exemption limit for filling Form 15G is Rs. 2.5 lakhs for individuals who are below 60 years of age. For individuals above 60 years of age, the basic exemption limit is Rs. 3 lakhs, and for individuals above 80 years of age, it is Rs. 5 lakhs.
Q4.) What is the validity period of Form 15G?
The validity period of Form 15G is for one financial year, i.e., from 1st April to 31st March of the next year.
Q5.) Can Form 15G be submitted for multiple savings schemes?
Yes, Form 15G can be submitted for multiple savings schemes held in different banks or post offices.
Q6.) Is it mandatory to submit Form 15G every year?
Yes, Form 15G needs to be submitted every financial year if an individual wants to avoid TDS on their interest income.
Q7.) Can Form 15G be submitted by senior citizens?
Yes, senior citizens who have taxable income below the basic exemption limit can also fill Form 15G to avoid TDS on their interest income.
Q8.) Is it mandatory to have a PAN card to fill Form 15G?
Yes, it is mandatory to have a PAN card to fill Form 15G, and the PAN number needs to be provided in the form.
Q9.) Can NRI’s fill Form 15G?
No, NRIs are not eligible to fill Form 15G as they are not residents of India and are subject to different tax laws.
Q10.) Can Form 15G be submitted for fixed deposits held for more than one year?
No, Form 15G cannot be submitted for fixed deposits held for more than one year as the interest income earned on such deposits is taxable.
