It is the start of the financial year and now is a good time to figure out if you need to submit form 15G or 15H. For most individuals, this probably does not apply, but it may be applicable for your parents or if you or your spouse have a nil tax liability. In this post, lets go over when, why, where, who and how one can submit form 15G/15H.


Why submit Form 15

If you have large savings lying in your bank which accrues interest, or invested in Fixed Deposits (FDs), or have invested in other fixed income plans such as postal savings scheme or senior citizen savings scheme etc, your bank or financial institution is required to deduct tax (tax deducted at source aka TDS) if the interest income exceeds Rs. 40,000 a year (in the interim budget 2019, the limit has been increased from Rs. 10,000 to Rs. 40,000 for the financial year 2019-20). Now, if you expect your tax to be zero on your total income in the financial year, you have to recover the TDS by filing your taxes at the end of financial year and wait for the refund. Wouldn't it be better if you can stop the bank from deducting TDS in the first place, if you are not liable to pay any income tax on your total income? That is where form 15G and form 15H come to your rescue. If you submit the form, your bank will not deduct any tax even if the interest income exceeds Rs. 40,000.


Who can submit

First criteria to be able to submit form 15 is that you have to be a resident Indian. You cannot submit if you are an NRI. You can submit Form 15G if you are under 60 and your total income from all sources is not taxable (for the financial year 2019-20, that limit is Rs. 5,00,000) and your total interest income is less than the basic exemption limit of Rs. 2,50,000. If you are over the age of 60 and have a total income that is less than Rs. 5,00,000, and your total interest income is less than the basic exemption limit of Rs. 3,00,000 for senior citizens or Rs. 5,00,000 for super senior citizens (more than 80 years of age) then you will need to submit Form 15H. Note that you are eligible to submit the form only if your interest income is under the basic exemption limit excluding any deductions such as Section 80C. Lets take a couple of examples to understand this better.


Example 1

Lets say your income from salary is Rs. 4,00,000 and your interest from bank is Rs. 20,000 and from one FD it is Rs. 50,000 and from another FD it is Rs. 80,000. You also plan to invest Rs. 1,00,000 in tax saving instruments such as ELSS, EPF, PPF etc. You are 35 years of age.


Income from salary = Rs. 4,00,000
Section 80C deductions = Rs. 1,00,000
Taxable income = Rs. 3,00,000
Interest income = Rs. 20,000 + Rs. 50,000 + Rs. 80,000 = Rs. 1,50,000
Total income = Rs. 3,00,000 + Rs. 1,50,000 = Rs. 4,50,000


In this case, the total income is less than Rs. 5,00,000 and the interest income is less than Rs. 2,50,000 and hence you are eligible to submit Form 15G.


Example 2

Lets say your income from salary is Rs. 3,00,000 and your interest from bank is Rs. 20,000 and from one FD it is Rs. 1,50,000 and from another FD it is Rs. 90,000. You also plan to invest Rs. 1,00,000 in tax saving instruments such as ELSS, EPF, PPF etc. You are 35 years of age.


Income from salary = Rs. 3,00,000
Section 80C deductions = Rs. 1,00,000
Taxable income = Rs. 2,00,000
Interest income = Rs. 20,000 + Rs. 1,50,000 + Rs. 90,000 = Rs. 2,60,000
Total income = Rs. 2,00,000 + Rs. 2,60,000 = Rs. 4,60,000


Your total income is less than Rs. 5,00,000 but your interest income is more than Rs. 2,50,000 and hence you are not eligible to submit Form 15.


Example 3

Everything is same as in the previous example except that your age is 65.

Since your income is less than Rs. 5,00,000 and your interest income is less than the basic exemption limit for Rs. 3,00,000 for a senior citizen, you are eligible to submit Form 15H.


Where to submit

You need to submit this form at all the banks and institutions where you are earning interest. If you don't submit the form, each bank will deduct tax independently which you can check in Form 26AS. Some banks may support submitting Form 15 online through net banking so you can avoid visiting each branch. Find out from the bank if they support online submissions. For example you can submit form 15 online via e-services in SBI bank. The best part about online submission is that a lot of details in the form will be filled up for you.


When to submit

You need to submit form 15 every financial year even if your FD or other investment is for a longer duration. It is a good idea to submit early in the financial year so your bank will not deduct anything before you submit. For example, senior citizen savings scheme (SCSS) pays you every quarter, and if you did not submit form 15 until say July, they may deduct tax in the June pay out.


How to fill the form

You can download the forms from your bank's website. For example here are links to Form 15G and Form 15H from SBI. Fill in the name, date of birth, PAN, address. email and phone number fields. For Status, mention whether individual or HUF. For Residential Status mention resident (NRIs cannot submit). Use the current financial year for Previous Year field. For the field whether assessed to tax under the income tax act, 1961?, answer yes if your income was taxed in any of the previous 6 years. If you answered yes, then mention the latest year in which you were taxed. In Estimated income for which declaration is made field, mention the income you are going to receive from the investment for which you don't want TDS to be deducted (this will be different for each form submission). In the Estimated total income of the P.Y. in which income mentioned in column 16 to be included field, mention the total income you expect for the financial year including the income from the current investment for which you are submitting the form.


Under Details of Form 15G/H other than this form filed during the previous year, if any field, mention the number of form 15G/H you are filing in the current financial year and the total amount. Under Details of income for which declaration is filed, mention the identification number (FD number, policy number etc), nature of income (SCSS, FD etc), section under which tax is deductible (usually section 56 of income tax act) and the amount.


Sign the form, complete the declaration section, sign and date. You are all done! Submit the form at your local branch or online. Hope this helps clarify a few things about form 15.


Disclaimer: The information in this post is current as on the published date. The exemption limits and tax free income limit may change at a later date. I am not liable for any tax decisions you make based on the information provided above. Make sure you verify the accuracy of the information.