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Individuals with total income below the tax limit can save TDS on interest by submitting Form 15G or Form 15H. Banks deduct TDS on interest income when the limit crosses the threshold of ₹40,000 in a financial year under Section 194A of the Income Tax Act. The amount is set at ₹50,000 for senior citizens. Here, the availability of two forms often confuses individuals as to which one is applicable to them.
That is why a comprehensive knowledge regarding the difference between 15G and 15H is essential to help individuals choose the right form.
So, let’s start this discussion with a short description of Form 15G and Form 15H and follow it up with their differences.
Form 15G is a declaration form made by taxpayers in which they request the bank for non-deduction of TDS as their income is below the minimum exemption limit.
The Income Tax Act 1961 provides relief on tax liability in certain circumstances. If an individual has a taxable income of below ₹2,50,000, they are not liable to pay income tax.
Here, if individuals earn interest on fixed deposits, banks can deduct TDS before crediting the interest amount to individuals’ accounts. However, if the total income does not cross the limit of ₹2,50,000, individuals can utilize Form 15G and avoid TDS deduction on interest income even if the amount goes beyond ₹40,000.
If individuals submit Form 15G, they can earn full interest income as banks would not deduct any TDS. To be able to submit Form 15G, an individual’s age must be less than 60 years.
Now that you know about Form 15G, let’s focus on Form 16H to better understand the 15G and 15H difference.
The objective of Form 15H is quite similar to that of Form 15G. It means individuals can claim TDS deduction in a financial year on interest earned from fixed deposits.
This form is particularly allotted for individuals who have reached the age of 60. Please note, the forms have a validity of one year. Therefore, to receive a TDS deduction on the interest generated from fixed deposits, individuals have to submit Form 15H every financial year.
With a clear understanding of the definition of both the forms mentioned above, we can now focus on the 15G and 15H form differences.
|
Parameters |
Form 15G |
Form 15H |
|
Eligibility |
Hindu Undivided Family (HUF) or trust and Indian residents less than 60 years of age are eligible for this form. |
Indian residents with an age of 60 years or above are eligible for this form. |
|
Document Required |
PAN card |
PAN card |
|
Uses |
Individuals can use Form 15G for non-deduction of TDS on Employers’ Provident Fund Withdrawal, interest from post office deposits, interest income from bank deposits, interest from rental income, from a life insurance policy, interest from corporate bond and debentures. |
Form 15H can be used for claiming non-deduction of TDS on the interest generated from fixed deposits, from corporate bonds, post office, on EPF withdrawal, rent. |
|
Benefits |
This form helps individuals (below 60 years) to save on TDS deductions from interest income in a financial year. [Benefits cannot be claimed by individuals who are Non-Resident-Indians or NRIs.] |
This form helps individuals (above 60 years) to save on TDS deductions from interest income in a financial year.[Benefits cannot be claimed by individuals who are Non-Resident-Indians or NRIs.] |
|
Issued Against |
This form is issued against a Fixed deposit holder having an age of below 60 years. |
This form is issued against the Fixed deposit holder and Recurring deposit holder aged 60 years or above. |
|
Issuer |
The Income Tax Department and all major banks of India issue Form 15G. |
The Income Tax Department and all major banks of India issue Form 15H. |
|
Time Duration |
For FY 2021-22, the form’s validity remains for 1 whole year i.e. till 2022-23. |
For FY 2021-22, the form’s validity remains for 1 whole year i.e. till 2022-23. |
|
Verification |
Validation status can be done through the e-filing portal. |
Validation status can be done through the e-filing portal. |
For Form 15G total interest income for a year should be less than that year’s exemption limit. For the financial year of 2021-22 (AY 2022-23) that amount is ₹2.5 Lakh.
Individuals wondering about the difference between Form 15G and Form 15H can now get a detailed answer from the above mentioned piece. Therefore, they can easily identify the form number as per their age and claim for non-deduction on interest income.
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Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
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