Form 15G/ 15H: Submit to Bank and get TDS-free interest on FD Returns


(Last Updated On: December 13, 2018)

Is bank deducting TDS on fixed deposit interest even if your earnings are below basic exemption limit?

Are you confused about the form to be given to bank for non-deduction of TDS?

If you have ever filled the form for opening fixed deposit with the bank, you must have seen a line printed at the end of form, “If you don’t submit 15G/ 15H form to the bank, fixed deposit interest shall be paid/ credited after deducting TDS thereon.”  Many of the persons don’t know about 15G/ 15H; others who know remain confused about eligibility criteria and the time limit to submit these forms. Hence our today’s blog focuses on describing nitty-gritty of these forms and how are they beneficial for you.


How bank pays the interest on fixed deposit?

In case of Interest from fixed deposits, the threshold limit above which banks are require to deduct TDS at the time of payment/ credit is Rs. 10,000. Thus once the aggregate amount of interest reaches above Rs. 10,000, banks start deducting TDS at time of payment/ credit.

Want to know more about fixed deposits? click here.


How 15G/ 15H forms come into scenario?

By submitting 15G/ 15H forms, you can ask the bank not to deduct TDS on interest income from fixed deposits. They are self-declaration submitted to bank for non-deduction of tax on interest on fixed deposits. But beware of the conditions attached with the submission of these forms as non-compliance or incorrect compliance of any of the attached conditions can lead to severe penalties.


What are the eligibility criteria of 15G/ 15H form?


15G Form:

Only persons less than 60 years of age are eligible to submit this form. Following are the attached conditions:
  1. Person should be resident of India;
  2. He should be Individual/ HUF;
  3. He must have Permanent Account Number (PAN);
  4. Tax on estimated total income (including the interest from fixed deposit) at the end of the year should be NIL;
  5. Total interest income to be earned should be less than basic exemption limit (Rs. 250000 for F.Y. 2015-16)

15H Form:

Persons aged 60 years or more are eligible to submit this form. But ensure adhering to attached conditions:
  1. Person should be resident of India;
  2. He should be Individual/ HUF;
  3. He must have Permanent Account Number (PAN);
  4. Tax on estimated total income (including the interest from fixed deposit) at the end of the year should be NIL;


Let’s understand the concept with the help of some illustrations:


Case 1:
         Asmita, aged 45 years earns following income:

                        Income from Salary = Rs. 1,00,000

                        Interest on Fixed Deposits = Rs.  50,000

Solution:      In this case, Total taxable income of Asmita is Rs. 1,50,000. Asmita is eligible to submit Form 15G since tax on estimated total income is NIL and total interest amount earned is less than basic exemption limit.


Case 2:
         Rahul, aged 50 years earns following income:

                        Income from Salary = Rs. 50,000

                        Interest on Fixed Deposits = Rs.  2,70,000

                        LIC premium (eligible for Deduction u/s 80c) = 80,000

Solution:      In this case, Total taxable income of Rahul is Rs. 2,40,000 (50,000 + 2,70,000 – 80,000). Although no tax is payable on the income but since interest amount is more than basic exemption limit, hence Rahul is not eligible to submit Form 15G.


Case 3:
         Rajeev, aged 67 years earns following income:

                        Interest on Fixed Deposits = Rs.  3,20,000

Solution:      In this case, total taxable income of Rajeev Rs. 3,20,000. Even if interest amount is more than basic exemption limit (Rs. 3,00,000 in case of senior citizens), but since no tax is payable on income ({10% of [3,20,000 – 3,00,000] = 2,000} – Rebate u/s 87A), hence Rajeev is eligible to submit Form 15H.


Some other important points:

  • Since banks don’t deduct TDS on interest credited in saving bank account, hence no 15G/ 15H form required to be submitted for saving bank interest;
  • Form 15G/ 15H is required to be filed for each year separately;
  • Preferably, the form should be submitted at the starting of year.
  • Ensure quoting PAN no. along with Form 15G/ 15H else bank shall deduct TDS @ 20%, even if you submit Form 15G/ 15H.

What if you forgot to submit Form 15G/ 15H to bank?

Even if tax on estimated total income is NIL and you have forgotten to submit 15G/15H to bank in the starting of year, don’t worry; submit it as soon as possible. Since TDS is deducted on quarterly intervals by bank, hence as and when you submit form, it ensures that bank doesn’t deduct TDS for the remaining year. As far as TDS already deducted is concerned, claim it in the income tax return to be filed for the respective year.

Beware! You may be liable to penalty if you submit incorrect form

On submitting incorrect form to bank, penalty u/s 277 of Income Tax act i.e. imprisonment for 3 months to 2 years and fine can be levied.

For better understanding and help in submission of correct forms, take the help of our experts.
If you have any queries, please mention it in the comment section. We will love to help you out.

CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.