Form 15G and Form 15H are self declaration forms that individual taxpayers submit to tax deductors in order to request for non-deduction of TDS if their estimated tax liability during the relevant financial year is Nil.
Question: As the new financial year has commenced, kindly guide us on the requirement for submission of Forms 15G & 15H by the taxpayers to banks. Who are the eligible taxpayers to submit the said forms? Further, what are the applicable deadlines for submitting these forms?
Answer given by Dr. Suresh Surana, Founder, RSM India: Form 15G and Form 15H are self declaration forms that individual taxpayers submit to tax deductors (such as banks, financial institutions, etc.) in order to request for non-deduction of TDS if their estimated tax liability during the relevant financial year is Nil.
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Banks are required to deduct TDS where the interest income exceeds Rs. 40,000 in a particular financial year (Rs 50,000 in case of senior citizens) as per Section 194A of the Income Tax Act, 1961. However, if the estimated tax liability for the relevant financial year is Nil, the taxpayer can submit Form 15G or 15H (as applicable) to the bank requesting them not to deduct any TDS from their interest income.
These forms can typically be submitted online through the respective portals of banks or financial institutions, or they can be submitted physically at the concerned bank branch.
Further, it is pertinent to note that the forms are valid for one financial year only and must be submitted separately for each financial year.
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Eligible Persons for Submission of Form 15G & 15H
Form 15G
In accordance with the Section 197A(1A) of the IT Act read with Rule 29C of the IT Rules, 1962, Form 15G can be submitted by the resident Individuals with age less than 60 years or HUF or even a Trust or any other assessee whose estimated tax liability during the relevant financial year is Nil. However, any company or firm or non-residents would not be eligible to submit Form 15G.
Form 15H
In accordance with the Section 197A(1C) of the IT Act read with Rule 29C of the IT Rules, 1962, Form 15H can be submitted by resident individuals who are senior citizens (i.e. aged 60 years or more) whose estimated tax liability during the relevant financial year is Nil.
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Timeline to Submit Form 15G and 15H
* Ideally, these forms should be submitted before the start of the financial year for which TDS is to be deducted or before the first income payment which is subject to TDS.
* However, they can be submitted at anytime during the financial year.
* The deductor will consider these forms for the relevant financial year from the date of submission until the end of that financial year. For instance, in case the taxpayer is submitting the form in August, the TDS deducted for the period of April-August would only be refunded (if applicable) once the tax return of income is furnished. This would lead to unnecessary blocking of funds for the taxpayers.
* Thus, it is recommendable to submit the forms well in advance to ensure that TDS is not deducted on your income.
