Introduction:

As per Section 194A of the Income Tax Act of 1961, if your interest income from FDs exceeds ₹40,000 (or ₹50,000 for senior citizens) in a financial year, banks are liable to deduct TDS from 10% Nonetheless, if your income falls below the taxable threshold, you have the option to submit Form 15G (for non-senior citizens) or Form 15H (for senior citizens). Upon submission of either form, banks refrain from deducting TDS.

Now, you may be wondering which of these two forms to fill out. To clear any doubt, here is an in-depth explanation of the difference between Form 15G and Form 15H.

Form 15G and Form 15H:

Form 15G and Form 15H are  self-declaration forms through which you request the bank to avoid deduction of TDS on your interest income. Many banks offer the option to submit these forms online through their official portals or mobile apps. However, it is important to note that it is compulsory to provide your PAN. In addition, these cards are intended for Indian residents only; Non-Resident Indians (NRIs) cannot use it to avoid TDS deduction.

Form 15G:

Eligibility Criteria for Form 15G:

• To qualify for submitting Form 15G, you must:
• Reside in India for the entire financial year to be eligible.
• Must be under 60 years of age
• Be an individual or a non-corporate entity, excluding companies and firms.
• Have no tax liability based on your total taxable income for the financial year.
• Have a total interest income that falls below the basic exemption limit for the financial year.

Features of Form 15G:

• The form requested that tax withheld at source (TDS) not be deducted from their interest income, if their annual income is still below the basic exemption limit
• To avail themselves of the benefits of Form 15G, individuals must submit the form for existing investments during the first quarter of the financial year
• Form 15G, the self-identification form, is filed with banks and other financial institutions by individuals under 60 years of age. The instructions for Form 15G are mentioned in Section 197A, 1961 of the Income Tax Act
• The current system of Form 15G was introduced by the Central Board of Direct Taxes (CBDT) in 2015 to facilitate tax compliance for tax evaders and deductors
• Form 15G must be filed before first interest loan for new deposits.

Steps  to Fill  Form 15G:

• Enter your name and PAN number exactly as they appear on your PAN card
• Indicate whether you are an individual or a Hindu Undivided Family (HUF)
• Enter the current fiscal year for which you are completing the form
• This form applies only to Indian residents
• Provide your current address, email, phone and mobile number.
• If your income exceeded the taxable limit in any of the past 6 years, please select ‘yes’
• Enter the most recent year in which your income exceeded the taxable limit
• Provide total income (including interest income) not subject to TDS deduction
• Please indicate the total number of documents you have completed, and the corresponding amount in which the declaration is being sent
• Enter the total income for which you filed Form 15G during the previous year.
• Fill in the identification number of the relevant investment/account, the nature of income, and the Section under which tax is deductible. Additionally, provide details such as the fixed deposit account number, recurring deposit details, NSCs details, life insurance policy number, etc.”
• Sign the form, and indicate your authority if you are representing a HUF or an Association of Persons (AOP).

 Form 15H:

Features of Form 15H:

• Form 15H is a self-declaration form that individuals under 60 years of age can submit to banks and other financial institutions. The regulations governing Form 15H are outlined in Section 197A of the Income Tax Act, 1961The form requests that tax deducted at source (TDS) not be deducted from their interest income if their annual income falls below the basic exemption limit
• To avail the benefits of Form 15H, individuals must file a default closure form during the first quarter of the fiscal year
• Form 15H must be submitted prior to the first interest credit for new investments.

Eligibility Criteria:

• To qualify for submitting Form 15H, you must
• An individual taxpayer, not an entity or organization
• Any individual aged 60 years or above
• Any individual with no tax liability for the relevant financial year.

Steps to Fill  Form 15H:

• Enter your name and PAN number exactly as they appear on your PAN card
• Declare whether you are an individual or a Hindu Undivided Family (HUF) .
• Enter the current financial year for which you are filling out the form.
• This form applies only to Indian residents.
• Provide your current address, email, phone and mobile number
• If your income has exceeded the taxable limit in any of the past 6 years, please select ‘yes’
• Provide total income (including interest income) not subject to TDS deduction.
• Please indicate the total number of documents you have filled out and the corresponding amount for which the declaration is being sent.
• Provide the identification number of relevant investment/account, nature of income, and Section under which tax is deductible. Also, include details such as fixed deposit account number, recurring deposit details, NSCs details, life insurance policy number, etc.

Submitting the Form 15G and 15H:

• Individuals can submit these forms to their respective bank branches offline, or alternatively, they can opt for the online submission process as outlined below
• Access your account on the website of your respective bank
• Go to the ‘e-Services’ section and choose ‘Form 15G/Form 15H’
• “Click on your CIF number in the new tab and then select ‘Submit’.”
• “Select the branch code of your bank where you want to submit your form, then click ‘Submit
• Review the details of your filled Form 15G/15H displayed on the next screen, then click ‘Confirm’
• Enter the received OTP on your mobile number, then click on ‘Confirm’.
• After successful submission, you will receive a UIN number, which can be downloaded.

Difference between the  Form 15G and Form 15H:

Form 15 G	Form 15 H
Individuals, Hindu Undivided Families (HUFs), and trusts	Individuals
Less than 60 years	60 years and above
Rs. 2.5 lakh annually	Rs. 5 lakh for individuals aged 80 years and above, and Rs. 3 lakh for others.
Form 15G is issued by all major banks in India as well as the Income Tax Department.	Form 15H is issued by all major banks in India as well as the Income Tax Department.

Penalty:

Providing incorrect information in Form 15G or Form 15H may result in penalties under Section 277 of the Income Tax Act, 1961. Individuals found making false claims could face imprisonment ranging from 3 months to 2 years, as well as fines. In cases of tax evasion exceeding Rs. 25 lakh, the term of imprisonment can be extended up to 7 years.

Final Word :

When investing in FDs, TDS is deducted from the interest earned if it exceeds ₹40,000 for non-senior citizens (₹50,000 for senior citizens). However, you can avoid this deduction by submitting either Form 15G or Form 15H to the bank, provided your total income incurs zero tax liability. This article serves as a comprehensive guide to understanding and filling out Form 15G and Form 15H.