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Form 15H:- Learn How to Save TDS on Interest Income
Form 15H enables individuals to reduce the amount of their tax liability. The income tax department has several rules and regulations applicable to taxpayers, including provisions to help them save money. Form 15H creates a system to facilitate tax savings on interest income. In this comprehensive guide, we will share the overview of Section 15H of the Income Tax Act.
Contents :-
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What is Form 15H?
Form 15H is a self-declaration form stating that an individual is exempt from TDS for specific investments. The income tax department offers different tax-saving opportunities, and this form can significantly reduce your tax bill. A tax assessee may use it to inform the IT office that interest accrued through deposits qualifies for zero or reduced TDS. It has to be submitted by senior citizens over 60 years to reduce TDS on interest earned from fixed deposits and recurring deposits (RD) investments. Under current rules, TDS is deducted on interest only if annual interest income from these sources exceeds Rs. 50,000 for the financial year 2023-24.
Components of Form 15H
Form 15H comprises two parts, each equally crucial towards achieving its purpose. The form is user-friendly, making it easy to understand and fill out. Here are the elements of each part of the form:
Part 1:
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Name of individual (assessee)
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Age and occupation
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Details of investment
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Date of investing
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The amount invested
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An estimate of the amount one can receive
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Last assessment year
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Declaration
Part 2:
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Name and address of individual (deductor)
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Interest rate on investment
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The period in which the dividend was credited
How to Download Form 15H?
The majority of banks in India have a fillable version of Form 15H on their websites. You can also download the form, print it, fill it out, and submit it to the bank or authority. You will have to provide a separate Form 15H to each bank or post office you have deposits with to maximize the TDS benefit.
How to Fill Form 15H?
Section 1:
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The assessee has to enter their details like name, date of birth, residential status, etc.
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Enter “Yes” if you have been evaluated in any of the six assessment years before the cited assessment year.
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Enter your anticipated total income you seek to declare and estimated total income for the current year,
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Fill in other details such as your shares, deposit account number, LIC policy number, NSS information, and employee code.
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Sign the form.
Section 2:
The deductor depositing the TDS deducted with the bank authorities has to fill out and submit the second section of Form 15H.
Uses of Form 15H
According to the IT Act, Form 15H for senior citizens is helpful for diverse tax-saving objectives. These include:
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TDS on the interest income from fixed and recurring deposits
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TDS on EPF withdrawal when it is withdrawn before completion of 5 years of continuous service in a particular organization
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TDS on income exceeding Rs. 5,000 annually generated from corporate bonds
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TDS on income generated from Deposits in post offices
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TDS on rental payments exceeding Rs. 1.8 lakh in a year
How to Use Form 15H to Avoid TDS Deduction
You will have to fill out Part 1 of Form 15G for withdrawing your PF. The following fields will have to be filled to complete the form:
As a self-declaration form, Form 15H enables an assessee to apply for no deduction or lower deduction on FDs and RDs in banks and other forms of interest income. It states that the assessee is not liable for taxes on the interest income when the amount earned as interest is lower than the minimum tax slab under IT norms.
All they have to do is to furnish Form 15H to the deductor before the due date of the interest or the end of the applicable financial year. It is an undertaking stating that the income earned in the previous year is less than the taxable income bracket, keeping it safe from tax liability. If an individual has taxable income but still submits Form 15H to the bank, it is their responsibility to immediately inform his bank regarding it.
Once the bank receives the information, it will make the necessary changes and deduct the applicable TDS on the assessee’s interest income. The assessee need not submit Form 15H to the Income Tax Department directly. The deductor has to do it.
TDS Deductor and Form 15H
TDS deductors are required to allocate a Unique Identification Number (UIN) to all individuals submitting Form 15H or Form 15G to them. They also need to file a statement of the forms provided by all the taxpayers on a quarterly basis. Besides the details of all forms submitted to them, this statement has a list of all the sources of income exempted from tax. The deductor must retain these forms for a minimum period of 7 years after submission.
Who can Submit Form 15H?
Form 15H targets a specific population segment that meets the following criteria to be eligible to save TDS on interest earned from certain investments:
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An individual should be a resident of India, so NRIs cannot submit this form.
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Only individuals are eligible, so companies and organisations cannot submit it.
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They should be a senior citizen over the age of 60 years.
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They should have zero tax liability after computing the final tax amount according to their estimated income.
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The overall aggregate of the interest income from different sources in a financial year should be under the limits defined by the income tax slab.
You should use Form 15H when you earn an income from deposits (interest component). Not submitting this form could lead to TDS on this interest component. You must use it every financial year, when the interest earned on your investments reaches a specific limit.
Form 15H for EPF Withdrawal
You must fill out Form 15H for PF withdrawal when withdrawing offline to request EPFO not to deduct TDS on the amount withdrawn. Such TDS is applicable only if you withdraw EPF before the completion of 5 years of service and/or if the amount exceeds Rs. 50,000. From June 1, 2015, provident fund withdrawal before five years of service attracts TDS. Here are a few details you should know:
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TDS on EPF is applicable if withdrawal exceeds Rs 50,000 from June 2016. Earlier this limit was Rs 30,000.
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You can submit form 15G/15H if you withdraw offline.
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TDS will be deducted at 10% if PAN is submitted and 34.608% if PAN is not submitted.
Difference Between Form 15G and Form 15H
While both Form 15G and Form 15H aim to prevent TDS deduction and reduce tax liability, they differ in several ways. Here is a table highlighting the differences between them:
- | Form 15G | Form 15H |
|---|---|---|
Who can file? | Resident Indians below 60 years of age
Trusts
Hindu Undivided Family (HUF) | Resident Indians aged over 60 years |
When to submit? | Total taxable income below Rs 2.5 lakhs
or Interest received is the only income for the financial year and it is below Rs 2.5 lakhs | Total taxable income is below Rs 3 lakhs (Rs 5 lakhs for 80 years and above) or interest received is the only income for the financial year and it is below Rs 3 lakh |
Why submit? | Save TDS on interest | Save TDS on interest |
Where to submit? | Banks
EPFO
Bond issuer
with a Lessee (Corporate or AOP) | Banks
Post-Office
EPFO
Bond issuer
with a Lessee who is a Corporate or AOP |
Validity | Valid for one financial year | Valid for one financial year |
Where to get the forms? | Income Tax website, Banks, Post Offices, Insurers | Income Tax website, Banks, Post Offices, Insurers |
Compulsory document | PAN | PAN |
Conclusion
If you are a senior citizen, you want to save every penny of your income because you do not have a job or business that pays well. The best place to start saving is your interest income. Form 15H is a savior in this context as it enables you to avoid TDS on your deposits in banks, post offices, corporate bonds, and other investments. You can also use it to prevent deductions from EPF withdrawals. Following these tips can help you minimize your tax liability by submitting Form 15H correctly and on time.
Frequently asked questions
Q
What is Form 15H for senior citizens?
A
Form 15H for senior citizens is a self-declaration form that can be submitted by people aged 60 years or above to save themselves from TDS liability on interest earned from investments in fixed deposits and recurring deposits.
Q
How to fill out Form 15H new format?
A
The new format of Form 15H has two sections with different elements. These are to be filled by the assessee and the deductor.
Q
When to submit the 15H form to the bank?
A
Form 15H is valid only for one financial year. If you want to claim TDS benefit on your interest income from deposits, you must submit this form to the bank every year at the beginning of the financial year.
Q
How to fill out Form 15H online?
A
Since most banks offer online facilities, you can easily fill and submit Form 15H from the comfort of your home through the banking website or mobile app to save TDS on term-deposit interest.
Q
What would happen if Form 15H is not submitted?
A
If you fail to submit Form 15H, TDS will be deducted and you will receive a TDS certificate you can attach when submitting your income tax returns.
Q
What distinguishes form 15G from form 15H?
A
A person must submit both Form 15G and Form 15H when their income is below the taxable threshold so that no TDS is withheld from the income credited to their account. While both serve the same purpose of self-declaration, Form 15G is submitted by people under 60 and Form 15H applies to people over 60.
Q
Where should you submit Form 15H?
A
You can easily submit Form 15H to your bank or a post office. The best part is that you can do it online in a few clicks, without visiting the income tax office.
Prachi Jain
Chartered Accountant
Prachi Jain is a Chartered Accountant with a passion for simplifying finance and tax-related matters through her insightful and informative blogs. With a background in finance and a deep understanding of tax regulations, Prachi has established herself as a trusted source of financial wisdom. Prachi is committed to empowering her readers with the knowledge they need to make informed financial decisions. Her expertise and dedication shine through in every blog post, helping her audience navigate the intricacies of finance and taxes with confidence. Follow Prachi Jain's blog for practical insights and guidance on managing your finances effectively.
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