Form 15G to Save TDS on Interest Income

Form 15G is a self-declaration form provided by the Income Tax Department in India. It is used by individuals to declare that their income is below the taxable limit and seek exemption from tax deduction at source (TDS) on certain types of income. Form 15G is valid for one financial year and needs to be filed every year if the individual continues to meet the eligibility criteria. It's important to note that submitting Form 15G does not absolve the individual from paying taxes if their total income exceeds the exemption limit. They must file their income tax returns (ITR) and pay taxes accordingly. Let's discuss in detail what Form 15G is, how to fill it, who can submit it, how to submit it, and the precautions to be taken while filing this form.

What is Form 15G?

Form 15G is a self-declaration form that individuals can file and submit to banks or financial institutions to prevent the deduction of TDS (Tax Deducted at Source) on interest income earned or accrued in a financial year. This form is used when the individual's estimated total income is below the basic exemption limit (₹2,50,000, ₹3,00,000, or ₹5,00,000, as applicable) and there is no tax liability for that particular year.

For non-senior citizens, the interest income must also be below the basic exemption limit to fill Form 15G, even if there is no tax liability on the total estimated income.
According to the Income Tax Act, financial institutions and other organizations must deduct TDS when crediting interest income to an individual's account if the amount exceeds ₹40,000 (or ₹50,000 for senior citizens).

It is a common misconception that interest on fixed deposits is calculated at maturity. In reality, interest is calculated periodically, and TDS on the interest is deducted accordingly, which is reflected in your Form 26AS.

When to File Form 15G?

Form 15G is valid for one financial year and must be submitted every year at the beginning of the financial year to avoid TDS deduction by banks or any institutions liable to deduct TDS from your interest income.

Eligibility to File Form 15G

Any Resident Individual: Must be below 60 years of age.
Hindu Undivided Family (HUF)
Trust or Any Person: Other than a company or firm.
Interest Income Criteria: Must have interest income from Fixed Deposits (FD) below the basic exemption limit of ₹2.5 lakhs.
Tax Liability: There should be no final tax liability.

Additionally, anyone with a valid PAN can submit Form 15G.

Why is Form 15G Needed?

Banks and public financial institutions deduct TDS on term deposit interest income while crediting the periodic interest to your account. Suppose your total income is below the basic exemption limit, and there is no final tax liability in a particular financial year. In that case, you can avoid a TDS deduction by filing Form 15G. Filing Form 15G allows an individual to declare that their income during the financial year is less than the basic exemption limit, ensuring no TDS is deducted from their pay. Note: Banks and financial institutions do not deduct TDS from savings bank accounts.

For Which Transactions Can 15G Form be Submitted?

Form 15G can be submitted by resident individuals under the age of 60 years during the financial year. This form is used when an individual expects to earn interest income exceeding ₹40,000 (or ₹50,000 for senior citizens) during the financial year and requests an exemption from TDS on that income. Here are some everyday transactions where Form 15G can be submitted:

Bank Deposits: To prevent TDS on interest income from fixed, recurring, and other term deposits.
EPF Withdrawals: If the total EPF balance withdrawn is more than ₹50,000 before completing five years of service.
Post Office Deposits: To avoid TDS on interest income from deposits in post office schemes.
Corporate Bonds: To avoid TDS on interest income from corporate bonds.
Income from Securities: To prevent TDS on income from securities if it exceeds the specified threshold.

By submitting Form 15G, individuals can ensure that no TDS is deducted from their interest income, provided they meet the eligibility criteria.

How to Fill Form 15G?

Download the Form: Obtain Form 15G from the EPFO website or any other reliable source. (We have attached the form below for ready reference).
Fill in the Details: Carefully fill in the required details, ensuring accuracy.
Enter your correct PAN number and annual income.
Sign the Form: Sign the form in the presence of a witness.
Attach PAN Card Copy: Attach a copy of your PAN card with the filled form.
Submit the Form: Submit the completed Form 15G to your EPFO office along with your PF withdrawal request.

Remember to keep a copy of the filled Form 15G for your records. Also read: Form 15G and Form 15H

Download Form 15G

You can easily download Form 15G from our website. We have attached the form for your convenience and ready reference. Click the link below to download and start filling out your Form 15G today. [pdf-embedder url="https://www.indiafilings.com/learn/wp-content/uploads/2018/04/Form15G.pdf"]

Information Required

This form requires the submission of some basic information, a verification, and a declaration that must be signed and submitted. The form is divided into two parts:

Part 1: To Be Filled by the Individual

Name of the Individual: Full name as per PAN records.
PAN: Permanent Account Number.
Status: Individual or HUF (Hindu Undivided Family).
Address: Residential address, including city, state, and PIN code.
Previous Year: Financial year for which the form is being submitted.
Residential Status: Confirm that the individual is a resident of India.
Estimated Total Income: Total estimated income for the financial year.
Estimated Total Income for which Declaration is Made: Details of the income for which the declaration is made.
Details of Form 15G Other than This Form Filed During the Previous Year: If any forms were submitted earlier in the same financial year.
Aggregate Amount of Income for Which Form 15G is Filed: Total income for which Form 15G has been filed.
Investment Details: Details of investments such as term deposits.
Signature: The individual’s signature.

Part 2: To Be Filled by the Authority

Name and Address of the Institution: Name and address of the bank or institution receiving the form.
PAN and TAN of the Institution: Permanent Account Number and Tax Deduction and Collection Account Number.
Receipt Date: Date when the institution receives the form.
Signature of the Receiver: Signature of the person receiving the form.

Steps to Submit Form

Forms can be conveniently submitted from your home or office. Here's how: Internet Banking:

Log in to your bank's Internet Banking portal.
Navigate to the TDS section.
Select the option to submit Form 15G.
Fill in the required details and submit the form.

Mobile App:

Open your bank's mobile app.
Go to the TDS section or find the option to submit Form 15G.
Fill in the necessary details and submit the form.

Submitting Form 15G through Internet Banking or the Mobile app can save on Tax Deducted at Source (TDS) on term-deposit interest.

Can Form 15G Be Submitted Even if Your Total Income Exceeds the Tax Exemption Level?

No, Form 15G cannot be submitted if the total interest income for the year exceeds the basic exemption limit. According to the Income Tax Act, this form can only be issued to those who estimate their total income to be zero after considering deductions and allowances and whose total interest income is below the exemption limit.

What to Do If You Forget to the Form

If you forget to submit Form 15G and the bank has already deducted TDS, you can take the following steps to rectify the situation: File Your Income Tax Return:

File your income tax return to claim a refund of the excess TDS deducted. The income tax department will process and refund the excess TDS, not the banks or deductors.

You can file your ITR quickly via IndiaFilings. [shortcode_20] Submit Form 15G Immediately:

Even if you missed the initial submission, submit Form 15G as soon as possible to prevent further TDS deductions for the remaining financial year. This will help avoid additional deductions.

Provide Necessary Details:

When filing your income tax return, include all relevant details, such as the TDS amount deducted by the bank and other necessary information. This will help the income tax department process your refund efficiently.

Keep Supporting Documents:

Maintain records of all supporting documents, including Form 15G and proof of TDS deductions. These documents will serve as evidence during the income tax assessment process.

Seek Professional Assistance If Needed:

If you are unsure about the filing process or need assistance, consider consulting a tax professional. Tax experts at IndiaFilings can provide step-by-step guidance for tax filing.

Even if your income is below the basic exemption limit, there are certain conditions under which you still need to file an ITR (Income Tax Return). To find out more about these conditions, read on. If you meet any of these criteria, filing an ITR may be mandatory. However, ITR filing can be complex, so it's advisable to seek professional help to ensure accurate filing and avoid potential notices. The filing of ITRs for FY 2023-24 has started. Please file your ITR as soon as possible to avoid notices and penalties. [shortcode_20]