Understanding Form 15G and 15H: A Guide for Salaried Employees in India

Forms 15G and 15H are essential tax-related documents that help Indian taxpayers prevent Tax Deducted at Source (TDS) on certain types of income. For salaried employees, understanding these forms can lead to better cash flow management and reduce the hassle of claiming TDS refunds later.

What are Forms 15G and 15H?

Forms 15G and 15H are self-declaration forms submitted to banks, financial institutions, or employers to prevent TDS deduction at source. While both forms serve similar purposes, they are meant for different categories of taxpayers:

• Form 15G: For individuals below 60 years of age
• Form 15H: For senior citizens aged 60 years and above

Eligibility Criteria

Form 15G

To be eligible for submitting Form 15G, you must meet ALL of the following conditions:

• You must be an individual or a Hindu Undivided Family (HUF)
• You must be below 60 years of age during the financial year
• Your estimated total income for the financial year should be below the basic exemption limit (₹2.5 lakhs for FY 2023-24)
• The total interest income for the financial year should not exceed the basic exemption limit

Form 15H

For Form 15H, the criteria are more straightforward:

• You must be 60 years or above during the financial year
• You must be a resident individual
• Your estimated tax liability for the financial year should be NIL

Common Income Sources Where These Forms Apply

• Interest from Fixed Deposits (FDs)
• Interest from Recurring Deposits (RDs)
• Interest on securities
• Insurance commission
• National Savings Certificates (NSC)
• Post Office deposits

Practical Examples

Example 1: Fixed Deposit Interest

Rahul, age 35, has the following income:

• Salary: ₹2,20,000 per annum
• FD Interest: ₹25,000 per annum
• Total income: ₹2,45,000

Since his total income is below the basic exemption limit of ₹2.5 lakhs, Rahul can submit Form 15G to prevent TDS on his FD interest.

Example 2: Multiple Fixed Deposits

Priya, age 28, has:

• Salary: ₹2,30,000 per annum
• FD Interest (Bank A): ₹15,000
• FD Interest (Bank B): ₹10,000
• Total income: ₹2,55,000

Despite having income below the basic exemption limit from individual sources, Priya CANNOT submit Form 15G as her total income exceeds ₹2.5 lakhs.

Example 3: Senior Citizen

Mr. Kumar, age 65, has:

• Pension: ₹2,00,000 per annum
• FD Interest: ₹2,80,000 per annum
• Total income: ₹4,80,000

After considering deductions under Section 80C (₹1,50,000) and 80TTB (₹50,000), his taxable income falls below the tax threshold for senior citizens (₹3,00,000). He can submit Form 15H.

Important Points to Remember

Validity Period

• Forms are valid only for one financial year
• Must be submitted separately for each financial year
• Should be submitted at the beginning of the financial year or when making a new investment

Submission Process

• Submit separate forms to each bank/institution
• Forms can be submitted offline or online through net banking
• Some banks allow submission through email or their mobile apps

False Declaration Consequences

• Providing false information can lead to penalties under Section 277 of the Income Tax Act
• Penalty can include fine and imprisonment
• Always ensure accurate estimation of annual income

Revision and Withdrawal

• If income exceeds the estimated amount during the year, inform the bank/institution
• Withdraw the declaration to avoid penalties
• TDS will apply from the date of withdrawal

When Not to Submit These Forms

• When your total income exceeds the basic exemption limit (Form 15G)
• When you have tax liability for the year (Form 15H)
• When you're a non-resident Indian (NRI)
• When the income source doesn't require TDS deduction

Digital Submission Process

Many banks now offer digital submission options:

• Log in to your net banking account
• Navigate to the tax forms section
• Select Form 15G/15H submission
• Fill in the required details
• Verify using OTP or other authentication methods
• Download acknowledgment for your records

Post-Submission Steps

• Keep a copy of the submitted form
• Maintain a record of acknowledgment receipts
• Track your actual income throughout the year
• Inform the bank if income exceeds estimates
• Plan for next year's submission in advance

Forms 15G and 15H are valuable tools for managing tax deductions at source. Understanding their proper usage helps salaried employees maintain better cash flow and avoid unnecessary TDS deductions. Always ensure accurate income estimation and timely submission to maximize their benefits while staying compliant with tax regulations.