The major part of Indian economy still in the hands of lower and middle-class people. They use to keep their savings in the form of Fixed deposits in the Banks, the most trustable form of keeping your money and get back with interest. Once a year, everybody heard about Form 15G and 15H.
In this article, you must diagnosis all about Form 15G and 15H, What is Form 15G & Form 15H, its importance, how it works, the relation between Form 15G Form 15H and income tax department? benefits of filing Form 15G & Form 15H, how to fill form 15g & form 15h and why to fill form 15G & form 15H.
What is Form 15G and 15H?
Before understanding form15G/15H, you must drive to the other hand of the story
If you possess a fixed deposit in the bank, you will get the interest from the bank, if the interest income exceeds ₹ 10000, the bank will deduct TDS @ 10%, if the PAN details are not deposited the TDS @20% will be deducted.
Now, the role of form15G/15H comes into play, if you submit Form 15G and 15H to the bank, you will avoid deduction of TDS from your interest.
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Also Read: Tax liability on Car Allowances 2018
On can submit this form in banks, post offices or a company for avoiding TDS deduction.
Form 15G is required to fill for the Indian resident below 60 years of age.
Form 15H is required to fill for the Indian resident above 60 years of age.
The condition of filing Form 15G
Form 15G is a kind of undertaking submitted to the banks or financial institutes which reveals that:
- The interest income received for the banks is during the financial year is should not exceed the slab of 2.5 in FY 2017-2018.
- The income along with interest on estimated income as per tax department in NIL.
Although as per income tax norms any payment made to the individual as interest on securities or fixed deposits must be deducted with TDS.
A lot of people holding of fixed deposits does not lie in income tax slab, that’s why they submit Form 15G/H as undertaking to the bank and the bank will make the payment without deducting the TDS.
Sometimes, if your interest income is calculated above tax exemption slab, then there is no use of submission of Form G&H.
You must opt for refund channel by filling income tax return.
The condition of filing Form 15H
Form 15H is as same as Form 15G, the only difference is Form H is filed by the individual above the age 60. rest all the conditions are same as Form G.
What happens if you miss filing FormG or FormH
There are two scenarios under this head:
- If you are a taxpayer and fails under tax slab, the TDS deducted by the bank will be mentioned in the Form 16A or TDS certificate and that would be adjusted while filing income tax return and you have to pay tax after deduction of the TDS amount.
- If you are not supposed to pay tax or you are not in tax slab, the tax deducted by the bank would be refunded when you file an income tax return.
When should you submit Form 15G Form 15H
It is recommended to submit the form in the starting of the financial year so that the bank will not deduct your TDS from your interest income. If it was submitted after deducting of TDS in the bank, the only way to refund your TDS is by filing the income tax return.
Don’t forget the take acknowledgment from the bank after submitting the form.
From where you get Form G & H
You can get Form H & Form G from income tax website https://www.incometaxindia.gov.in/pages/downloads/most-used-forms.aspx