What Is Form 15G and Form 15H?
TDS or Tax Deducted at Source can become a headache for the individuals or senior citizens whose total annual income is lower than the basic exemption limit or the people who only have the interest income to depend on.
In the Interim budget 2019, the basic exemption limit on interest income limit is exceeded from Rs. 10,000 to Rs. 40,000. however, banks deduct tax at source under the provision when the bank pays the interest to its customer. Even if the total interest income is below the exemption limit they wouldn’t know about that.
Therefore, Form 15G and Form 15H have been created to request the non-deduction of the TDS on the interest income of the individuals or senior citizens. Individuals and senior citizens can submit the form 15G and form 15H respectively at the beginning of every financial year to inform the banks or person who is responsible to pay the income and deduct tax at source during the year. Once you submit the form 15G and 15H bank or responsible person will not deduct the TDS.
Form 15G applies to the individuals and HUF below the age of 60 years whose interest income is below the basic exemption limit and have no other tax liability on the annual income. It is a declaration form that states that an individual is not liable to pay any form of income tax or TDS according to the Income Tax Act, 1961.
Form 15H is also a self-declaration form like form 15G but for senior citizens or individuals aged 60 years or above. Unlike form 15G, form 15H can only be submitted by the senior citizens to request the rebate or non-deduction of TDS on the interest income from investments such as fixed deposits if certain conditions are met such net annual income should be below the basic exemption limit.
Form 15G Vs Form 15H
There are few main and specific differences between form 15G and Form 15H. they are based on the eligibility criteria, tax exemption limit, and age.
We hope this clear table of form 15 Vs form 15H will provide you with the clarity you are looking for.
Form 15G can be submitted by individuals below the age of 60
Form 15H can be submitted by individuals aged 60 years or more
Besides individuals, HUF or Hindu Undivided family can also submit from 15G
Apart from senior citizens, no other taxpayer can submit form 15H such as HUF, firms, AOP, and Pvt or public companies
This form can only be filled by individuals who have zero tax liability and annual income is lower than the basic exemption limit. It applies to both individual and HUF
Form 15H can be submitted by any senior citizen if their interest income exceeds the basic exemption limit but total annual income is below the basic annual income.
Eligibility Criteria For Form 15G and 15H
- Only the applicants below 60 years of age can submit form 15G.
- An applicant can be an individual or a HUF, but not any other company or firm can submit the form 15G.
- Applicant must be a resident of India.
- Total annual taxable income should be below the basic exemption limit.
- Interest income generated from the fixed or recurring deposit must be below the taxable limit I.e Rs.40,000.
- An applicant should be a senior citizen of 60 years of age or above.
- Applicant must be a resident of India.
- Only a senior citizen can fill form 15H, not any other entity ( HUF, firm, company, or an individual below 60 years of age).
- The total annual income should be below the basic exemption limit.
What Is The Basic Exemption Limit On Form 15G And 15H?
We were talking about the basic annual income exemption limit to deduct the TDS or Tax Deducted at Source but what exactly is the basic exemption limit on form 15G and form 15H is? Before we go ahead let us discuss the maximum annual income bar to submit both forms to banks and other financial institutions.
Individual Indian resident and HUF with a total annual income below Rs. 2.5 lakh are eligible to submit the form 15G if their age is below 60 years. Their basic exemption limit on tax should be below Rs. 40,000 also. If any of these basic exemption limits exceed then the applicant cannot request the non-deduction of the TDS.
Applicants between the age of 60-80 years can submit the form 15H and their basic annual income should be less than Rs.3 lakh. Senior citizens above the age of 80 years old must have an annual income below Rs.5 lakh. If any of these annual basic limits exceed then they cannot request the non-deduction of the TDS. However, senior citizens with an interest income of more than Rs.40,000 on investments can submit the form 15H and request the non-deduction of the TDS.
When To Submit Form 15G and 15H?
You are supposed to submit the forms 15G and 15H at the beginning of every financial year to the bank, or other financial institutions. Once you submit the form, these forms will ensure that no tax deductions at the source will happen when you will receive the interest on your investments.
However, there are few changes made by the government due to the spread of the novel Coronavirus. In the FY 2020-21, the validity of submitting the forms 15G and 15H has been extended up to 30th June 2020 from 31st March 2020. All these forms can be submitted in the first week of July 2020 for the FY 2020-21. Forms submitted between the 1st April 2020 and 30th June 2020 will be considered valid proof for the non-deduction of the TDS for the FY 2019-2020.
What If You Forgot To Submit Form 15g And 15H?
Many taxpayers forget to submit the forms 15G and 15H on time. As a result, banks and financial institutions deduct the tax on interest received on investments. In such cases, you can ask for a refund on tax deducted at the source from the Income Tax Department.
- If you are looking to get a refund on the TDS then you have to file your income tax return. You cannot submit the forms 15G and 15H after the due date and banks and financial institutions don’t have the authority to refund your TDS.
- Many banks and financial institutions deduct the quarterly TDS instead of annual. In such cases, you can submit the forms 15G and 15H later for the non-deduction of the TDS for the next quarter and at the end of the financial year, you can claim the deducted TDS by filing the Income Tax Return Form.
Where Can You Submit Form 15GAnd 15H?
Apart from the major banks, some financial institutions also deduct the tax at source on the interest received on the investment. You can also submit your forms 15G and 15H to these institutions at the start of the financial year instead of claiming the refund at the end.
These financial institutions are:
- Submit forms 15G and 15H at the TDS on early withdrawal of the Employees Provident Fund. EPF department can deduct the tax at source only if the service period of the individual is less than 5 years and the amount withdrawn is more than Rs.50,000
- You can submit the forms 15G and 15H for the non-deduction of the TDS on income generated from corporate bonds and debentures that are more than Rs.5000.
- If the income generated from the Life insurance is more than Rs.1 lakh then you can request for the non-deduction of TDS if your annual tax liability is zero.
- Submit forms 15G and 15H on the income generated from the post office deposits.
- If the income generated from the rent is more than Rs.2.4 lakh annually but the annual tax liability is zero then one can submit the form to the tenant for the non-deduction of the TDS.
- If the income generated from the insurance commission is more than Rs. 15000 every financial year and annual tax liability is NIL then insurance agent can submit the form 15G and 15H to the insurance company.