Form 15 G is used by investors to ensure no tax deduction at source is done for their income in the form of interest from banks. The bank is supposed to deduct tax at source in case interest on your fixed deposit, recurring deposit etc exceeds Rs 10,000 in a financial year. In case, your taxable income including the interest from bank is below the taxable income, you can fill form 15 G to ensure the bank does not deduct tax at source. Let’s understand the Form 15G in details, important points to remember, eligibility criteria for this declaration and also the precautions needed to be taken while filing such declarations.
What is Tax Deducted at Source?
Tax deduction at source is an indirect mode of collecting taxes, through which a certain percentage of income is deducted at the time of making payment. Some of the incomes subjected to TDS are salary, commission, interest on bank deposits, interest on bonds and rent etc. Tax so deducted by the income provider is remitted to the government. Such withheld tax can be adjusted against tax due for the entire financial year.
Form 15G is basically a self declaration for seeking non-deduction of TDS on specific income. This particular self declaration filing is dealt under the provisions of Section 197A of the Income Tax Act, 1961.
Information to be provided and structure of the Form 15 G has been considerably amended in the year 2015 to ease the compliance burden and also to minimize the cost of compliance on both tax deductor and tax deductee. New format of Form 15G and Form 15H introduced by CBDT (Central Board of Direct Taxes) has simplified the process of filing self-declaration for non-deduction of TDS.
Form 15 G can be submitted by individuals or person (other than company or a firm) below the age of 60 years. Any individual above 60 years falls in the category of senior citizens. Hence, declaration in Form 15H has to be submitted by them to claim non-deduction of TDS as per provisions of Section 197A of the Income Tax Act, 1961. This declaration needs to be submitted in the first quarter of the financial year for the existing investments. However, for new investments it can be submitted before the credit of first interest.
One must fulfil below eligibility criteria to submit Form 15G:
- You are an Individual or a person (other than company or a firm).
- Your residential status must be Indian Resident
- Your age should not be more than 60 years
- Tax liability calculated on the total taxable income is zero
- Your total interest income for the financial year is less than the basic exemption limit.
Form 15G has two sections. First part is for the individual who wants to claim no-deduction of TDS on certain incomes. Here is how you need to fill in the first part of Form 15G
- Fill in your name as it is mentioned on your PAN Card.
- Fill in your Permanent Account Number. Valid PAN card is mandatory to file Form 15G. If you fail to furnish your PAN details, your declaration will be treated as invalid declaration.
- Declaration in Form 15G can be furnished by an individual or a person (other than company or a firm). Hence, mention the correct status.
- Previous year has to be the financial year for which you are claiming non-deduction of TDS
- Mention your residential status such as Resident individual.
- Mention your communication address correctly along with PIN code
- Provide valid email ID and contact number for further communications
- Tick mark ‘’yes’’ bracket if you were assessed to tax under the provisions of Income Tax Act, 1961 for any of the previous assessment years. You should also have to mention the latest assessment year for which your returns were assessed.
- Estimated income for which you are making declaration needs to be clearly mentioned
- Total estimated income for the financial year (which includes all the income)
- If you have already filed Form 15G anytime during the financial year, then the details of previous declaration along with aggregate amount of income to be mentioned in the present declaration.
- Last part of the section 1 talks about the investment details for which you are filing declaration. You need to furnish the investment account number (term deposit/ life insurance policy number/ employee code etc)
- After filling the entire field, recheck all the details to ensure there is no error.
Second part of the form pertains to deductor. Details in second section are to be filled by the deductor who is going to deposit the tax deducted at source to government.
In case you forget to submit Form 15G in time and your deductor has deducted tax, here’s what you can do:
- Claim your TDS refund by filing income tax return: Once bank or any other deductor deducts a tax deducted at source, they cannot refund the same to you as they would have already deposited the amount to the Income Tax Department. The only way out to get the deducted tax is to claim the refund via income tax return filing. Upon verification, Income Tax Department will process your refund claim request.
- Immediately submit Form 15 G to avoid further deductions for the year: Normally, banks deduct the TDS at the quarter end when proportionate interest is calculated on fixed deposit. It’s better to submit the Form 15G as soon as possible to avoid any more deductions for the year.
TDS on Interest from Bank Deposits: Banks are supposed to deduct TDS if the interest amount on fixed deposit is more than Rs 10,000 in a year. Important point to note here is, banks deduct TDS based on the provisional interest not on the basis of payment. Hence, even if the tenure of a fixed deposit is more than one year also; you need to submit Form 15G to avoid deduction of TDS.
TDS on Employee Provident Fund Withdrawal: If Employee provident fund is withdrawn before 5 years of service tenure, TDS is applicable on the proceeds. However, if your total taxable income including the provident fund withdrawal balance is zero, and then you can submit Form 15G for non-deduction of TDS.
TDS on interest from post office deposits: If you satisfy all the conditions to submit Form 15G, post office which provides deposit service also accept Form 15G declarations for your post office deposits and national savings schemes.
TDS on income from corporate bonds and debentures: Income from corporate bonds exceeding Rs.5000 a year is subjected to tax deducted at source. In such cases, if you are eligible to submit Form 15G, you can do so and request the issuer of bonds to not deduct TDS.
TDS on proceeds from Life Insurance Policy: Under the provision of Section 194DA of the Income Tax Act, 1961, if the maturity proceeds from life insurance policy exceeds Rs. 1 lakh; such proceeds are subjected to tax deductions at source. However, if all conditions mentioned for Form 15G declarations are satisfied, and then tax payer can submit Form 15G to life insurance company for asking then not to deduct TDS.
- TDS on Rental income: If your rental income for the financial year exceeds Rs. 1.8 lakh, such income is subjected to tax deductions at source. However, your taxable income falls below the basic exemption limit, and then you can submit Form 15G for non-deduction of TDS.
- Form 15G can be submitted by both individual and Hindu Undivided Family. Whereas Form 15H can only be submitted by individuals
- Form 15G has to be used by person below 60 years of age. Form 15H is specifically for senior citizens who are above 60 years of age
- In case of Form 15 G, your total interest income should not exceed your basic tax exemption limit. But, in case of Form 15 H this condition does not apply. Senior citizens can submit Form 15H even if the total interest for the financial year is more than the basic tax exemption limit.
- If your total aggregate income is more than the basic tax exemption limit, you are not eligible to submit Form 15 G. However, this condition is applied in case of Form 15H. It allows the deductee to file non-deduction declaration even if the aggregate total income for the financial year is more than the basic tax exemption limit.
Illustration to Understand the Criteria of Form 15G
|Age||50 years||23 years||66 years||68 years|
|Salary Income||Rs. 1,80,000||-||-||-|
|Pension received||-||-||Rs. 1,10,000||-|
|Interest from Fixed Deposit||Rs. 86,000||Rs. 2,61,000||Rs. 1,80,000||Rs. 3,40,000|
|Total Income for the year (before section 80 Deductions)||2,66,000||2,61,000||2,90,000||3,40,000|
|Deductions allowed under section 80||Rs. 45,000||Rs. 30,000||Rs. 10,000||Rs. 55,000|
|Total Taxable income||Rs. 2,21,000||Rs. 2,31,000||Rs. 2,80,000||Rs. 2,85,000|
|Basic Exemption Limit||Rs. 2,50,000||Rs. 2,50,000||Rs. 3,00,000||Rs. 3,00,000|
|Are they eligible to submit Form 15G?||Yes||No||No||No|
|Explanation||Form 15G can be submitted as the total tax liability for the year is nil and aggregate interest income for the year is less than basic exemption limit. And she also satisfies the age criteria of below 60||Form 15G cannot be submitted since aggregate interest income for the year is more than basic exemption limit||Form 15G cannot be submitted as she is more than 60 years old. However, Form 15H can be submitted in this case as tax calculated on total income is nil.||Form 15G cannot be submitted as she is more than 60 years old. However, Form 15H can be submitted in this case as tax calculated on total income is nil.|
Central Board of Direct Taxes (CBDT) has digitalized the process of submission of Form 15G and Form 15H. As we all know Form 15G is a self declaration form which needs to be furnished by the tax payer to his deductor for Nil/lower deduction of Tax deducted at source. Form 15G declaration can be furnished in both paper formats as well as in electronic format.
Here is the flow of Form 15G/ 15H submission process:
- Eligible deductees to submit Form 15G or Form 15H to the deductor either by way of physical forms or by way of online filing.
- Deductor will upload the details on quarterly basis. Such information are forwarded/ uploaded to
-Income Tax Department (details from all forms collected by deductees are shared on quarterly basis)
-Deductor will file the TDS return quarterly and mention all the details in the filing
- It’s the responsibility of deductor to reconcile the details uploaded in both the places mentioned above.( Income Tax Department and in TDS return filing)
Here is the procedure for e-submission of Form 15G
- Tax payer needs to fill in the Form 15G online and submit it. As per Central Board of Direct Taxes (CBDT), deductor is supposed to assign UIN (Unique Identification Number) to each self declaration made by tax payers.
- Deductor needs to furnish the details of all the self declaration along with unique identification number (UIN) to Income Tax Department via quarterly TDS statement.
- We all are aware that Form 15G declaration holds good only for that particular financial year. A fresh declaration needs to be submitted for the next financial year. However, as per rules and regulations deductor is supposed to retain the Form 15G for seven years.
You must have online access or internet banking facility for submitting Form 15G in electronic formats. Here’s how you can do it:
- Log into your banks internet baking with user ID and password
- Click on online fixed deposits tab which will take you to the page where your fixed deposit details are displayed.
- On the same page, you will have an option to generate Form 15G and Form 15H. Click on the link (ensure to choose the form) to download.
- Once the form is opened online in fill able format, start filling up the details and information very carefully.
- Mention the branch details of the bank. Take help of the branch locator option to easily find the details of bank branch.
- Fill in all other details pertaining to your investment without any error and submit it.
- You must have a valid reason to fill the declaration of Form 15G. Ensure you satisfy all the required conditions of Form 15G eligibility before you think of submitting
Two Important Crieterias to be met before submitting Form 15 G are as below:
-Your final tax liability on the total estimated income for the year (calculated as per the Income Tax Act) should be nil
-The total aggregate interest income for the financial year is not more than your basic exemption limit.( Rs.2.5 lakh for FY 2015-16)
- Submit the declaration in the beginning of the financial year
- It’s important to enclose the PAN card details and a copy of PAN while submitting Form 15G. In case you fail to furnish PAN card details, deductors will deduct the TDS at the rate of 20%
|Investment Type||Sections of Income Tax Act||Treshhold limit||TDS (with Valid PAN)||TDS without PAN|
|Interest on Bank Deposits||194A||10,000||10%||20.00%|
|EPF Proceeds- Premature Withdrawal||192A||30,000||10%||34.61%|
|Interest on securities||193||–||10%||20.00%|
|Interest other than interest on securities||194A||5,000||10%||20.00%|
Providing false declaration in Form 15G just to avoid TDS can lead to fine and imprisonment under section 277
- There can be imprisonment for the period of 6 months to 7 years if wrong declaration was provided to evade the tax of more than a lakh
- For all other cases, imprisonment period may vary from 3 months to 3 years.
Hence, do not make any false declaration. Submit Form 15G only if you are eligible.
If you are eligible, ensure to submit Form 15 G every year at the beginning of the financial year with fresh details as your investments vary time to time. It’s also important to quote PAN details and all the other information related to the investment correctly to avoid any hassles. Ensure to fill the forms without any error and submit it to concerned income provider to avoid tax deduction. Remember, Form 15G is just to avoid the hassles of tax deduction at source and then seeking the refund for same. It’s important and mandatory to file your Income tax return even though there is no tax liability and no refund to be claimed. Make sure you do not make any false declaration in Form 15G.