TDS is a mechanism of the Income Tax Department of India under which tax is deducted from an individual’s interest income. However, the Income Tax Department has set a basic TDS exemption level of INR 2.5 lakhs for Form 15G and INR 3 lakhs for Form 15H. If you fall under these exemption levels, you are required to file Form 15G and Form 15H in order to get the tax exemption. In a nutshell, Form 15G is for individuals under the age of 60 years and Form 15H for Indians above the age of 60 years. Let’s understand the differences in detail.
What is Form 15G?
All Indian residents (individuals and not companies and firms), under the age of 60 years can file Form 15G to get an exemption on TDS. The Income Tax department has fixed the basic exemption limit for TDS and that is INR 2.5 lakhs per financial year (INR 3 Lakh for senior citizens).
If your interest income, i.e., interest on savings accounts or investments made, is less than this basic limit, you must file Form 15G in order to request your bank not to deduct tax. However, in case you forget to file it at the beginning of the financial year, file it as soon as possible. In case some TDS has been deducted, you can file another Form 15G to the Income Tax Department requesting them to return the excess TDS deducted. You need to file this Form every financial year as one Form is valid only for one year.
What is Form 15H?
Form 15H is somewhat similar to Form 15H. It is also filled by individuals who are seeking TDS exemption on interest income earned via savings account, fixed deposit, or other investments made. People of or above 60 years of age are only allowed to fill Form 15H. The basic exemption limit decided for senior citizens is INR 3 lakhs/financial year.
If your interest income does not cross this slab, you must file Form 15H at the beginning of the financial year. However, in case you delay submitting it to your bank, you can submit it as soon as possible to save further deductions. You can submit Form 15H to Income Tax to request them to return the excess TDS deducted. To avail of tax exemptions, you have to file this Form each financial year as it has the validity of only one financial year. Click here to know about form 15G.
Differences between Form 15G & Form 15H:
Although Form 15G and Form 15H sound similar, they have some striking differences that you must know about.
|Form 15G||Criteria||Form 15H|
|HUF (Hindu Undivided Family)/ Trusts/ Indian Residents||Eligibility||Indian Residents|
|Below 60 years of age||Age Limit||Above 60 years of age|
|All the major banks of India and Income Tax Department||Issued by||All the major banks of India and Income Tax Department|
|Against fixed deposits held by an individual||Issued against||Against fixed deposits and recurring deposits held by an individual|
|PAN Card||Documents Required||PAN Card|
|One financial year||Validity||One financial year|
|It is used for employer’s provident fund, post office deposits, rental income, insurance policy, debentures, and corporate bonds.||Used For||It is used for income from corporate bonds, fixed deposits, post office, rent, and EPF withdrawal.|
- The major difference lies in the age limit of the forms. Form 15G is filled by individuals below the age of 60, and on the other hand, Form 15H is filled by individuals above the age of 60.
- Only Indian residents are eligible to apply for Form 15H. However, Indian residents along with HUFs and trust can file for Form 15G.
- All the major banks of India offer Form 15G and Form 15H on their official website. From there, you can easily get the form, fill it along with all the details, and apply. Apart from banks, Income Tax also offers Form 15G and Form 15H on their official website from where you can apply it.
- For applying either Form 15G or 15H, a valid PAN Card is required. You must fill in your name as mentioned on the PAN Card.
- One Form is applicable only for one financial year. So, if you want TDS exemption for next year as well, you will have to apply for a fresh Form in the next financial year.
Form 15G and Form 15H are applied in order to request the financial institution or the income tax to not deduct tax as the income is below the basic exemption level. As it is a self-declaration, you must be aware of the tentative dates and be prepared to submit it on time without delay to suffer no TDS deduction. In case you delay, submit Form 15G or 15H (as applicable) to the Income Tax and the banks at the earliest. Make sure there is no false declaration as it can lead to imprisonment and fines.