Form 15G & Form 15H Filing — Stop TDS on Interest Income in India

Complete Guide to Form 15G & Form 15H — FY 2025-26

Every financial year, millions of bank depositors, senior citizens, and small investors in India have TDS deducted on their interest income — even when their total income is below the taxable limit. Banks, post offices, and other financial institutions are required to deduct TDS at 10% (or 20% if PAN is not linked) on interest income exceeding ₹40,000 per year (₹50,000 for senior citizens) under Section 194A of the Income Tax Act. This TDS deduction reduces the net interest credited to the depositor's account — even though the depositor may owe zero tax on that income.

The solution is Form 15G (for individuals below 60 years and HUFs) and Form 15H (for senior citizens aged 60 and above) — self-declaration forms that inform the payer that the depositor's total income does not attract any income tax, and therefore TDS should not be deducted. When a valid Form 15G or 15H is submitted at the beginning of the financial year, the payer is legally obligated not to deduct TDS on the specified income — ensuring the full interest amount is credited to the depositor.

Taxvio, based in Khatauli (Muzaffarnagar, UP), assists individuals, senior citizens, and HUFs in filing Form 15G and Form 15H correctly — verifying eligibility, computing total estimated income, and submitting declarations to banks, post offices, and other payers. We also provide annual renewal reminders and multi-bank consolidation for clients with deposits across multiple institutions.

What Is Form 15G — Eligibility & Conditions

Form 15G is a self-declaration under Sections 197A(1) and 197A(1A) of the Income Tax Act. The following conditions must all be satisfied to file Form 15G:

• Age condition — The declarant must be a resident individual below 60 years of age, an HUF, or a trust or AOP (Association of Persons). Individuals aged 60 and above must use Form 15H instead.
• Total income condition — The declarant's total income for the financial year (from all sources — salary, interest, rent, business, capital gains) must not exceed the basic exemption limit of ₹2.5 lakh (under old tax regime) or the applicable exemption limit. Under the new tax regime, the basic exemption is ₹3 lakh.
• Tax on total income must be nil — Even if total income slightly exceeds the basic exemption due to deductions, if the tax computed on total income (after all deductions) is nil, the condition is satisfied.
• Resident status — Only resident individuals and HUFs can file Form 15G. Non-residents (NRIs) cannot file Form 15G and must apply for lower deduction under Section 197 through a different process.
• Annual renewal — Form 15G is valid only for the financial year in which it is submitted. A fresh declaration must be filed at the start of every new financial year (April).

What Is Form 15H — Senior Citizen TDS Exemption

Form 15H is a self-declaration under Section 197A(1C) exclusively for senior citizens. It has a more relaxed eligibility condition compared to Form 15G:

• Age condition — The declarant must be a resident individual aged 60 years or above at any time during the financial year. Super senior citizens (80+) also use Form 15H.
• Tax on total income must be nil — Unlike Form 15G, there is no requirement that total income be below the basic exemption limit. A senior citizen with total income of ₹7 lakh can still file Form 15H if their tax liability is nil after deductions (e.g., 80C, 80D, standard deduction under new regime).
• Wider applicability — Senior citizens with pension income, interest income, and rental income can often file Form 15H even with total income above ₹5–6 lakh, as long as deductions bring tax to zero.
• Resident status — Must be a resident individual. NRI senior citizens cannot file Form 15H.
• Annual renewal — Like Form 15G, Form 15H must be renewed every financial year.

Where Can Form 15G / 15H Be Submitted?

Form 15G and 15H can be submitted to any person required to deduct TDS on specified income. Common situations include:

• Banks — For TDS on FD interest, RD interest, savings account interest (Section 194A). Each bank branch where FDs are held needs a separate declaration. Many banks now accept 15G/15H online through net banking or mobile app.
• Post Offices — For interest on Post Office Time Deposits, Senior Citizens Savings Scheme (SCSS), Monthly Income Scheme (MIS), and National Savings Certificates (NSC).
• Companies / NBFCs — For TDS on interest paid on company fixed deposits and NCD (Non-Convertible Debentures) interest (Section 194A).
• EPFO / Employer — For TDS on EPF withdrawals before completing 5 years of service (Section 192A). Form 15G can prevent TDS on premature EPF withdrawal if the withdrawal amount exceeds ₹50,000 and the member's income is below the exemption limit.
• Insurance Companies — For TDS on life insurance maturity proceeds (Section 194DA) where premium paid exceeded 10%/20% of sum assured.
• Mutual Funds — For TDS on dividends paid by mutual funds (Section 194K) exceeding ₹5,000 per year.
• Rental income payers — Individuals (not subject to audit) paying rent exceeding ₹50,000 per month under Section 194IB can receive Form 15G/15H from landlords. However, this provision has limited practical application.

Critical Rules for Filing Form 15G / 15H — Avoid These Mistakes

Incorrect filing of Form 15G / 15H is one of the most common tax compliance errors. Here are the critical rules every declarant must follow:

• Estimate total income from ALL sources — Many declarants only consider FD interest while filing 15G, ignoring salary, rent, or other income. Total income must include all sources — salary, pension, business, rental, capital gains, and interest from all FDs across all banks. If consolidated total income exceeds the exemption limit, Form 15G is not eligible.
• Submit before first interest credit — The declaration must be submitted at the start of the financial year (April 1). If submitted mid-year, TDS already deducted by the bank cannot be reversed; it can only be claimed as a refund in the ITR. There is no mechanism for banks to refund TDS already deducted.
• Submit to every bank / every branch — A single Form 15G submitted to one bank does not protect FDs in other banks. A separate declaration must be submitted to each institution and in many cases each branch where income is earned.
• Aggregate all interest income — In Part I of Form 15G, the declarant must mention the estimated income from the particular payer AND the aggregate estimated income from all sources. This total is what must be below the basic exemption limit.
• Annual renewal is mandatory — A Form 15G/15H submitted in April 2025 (for FY 2025-26) does not automatically carry forward to FY 2026-27. A fresh declaration is required every April.
• Payer must report to Income Tax Department — Banks and other payers who receive Form 15G/15H are required to report the declarations quarterly to the Income Tax Department. The Department cross-verifies these with the declarant's ITR. False declarations are prosecutable.

Consequences of Filing False Form 15G / 15H

Form 15G and 15H are legal declarations — filing them when ineligible is a criminal offence under the Income Tax Act:

• Section 277 — Prosecution — Knowingly making a false statement in any declaration (including Form 15G/15H) is punishable with imprisonment of 3 months to 3 years and a fine. If the tax evaded exceeds ₹25 lakh, imprisonment can extend to 7 years.
• TDS demand on payer — If the Income Tax Department discovers that TDS was not deducted due to a false Form 15G/15H, the payer (bank) is treated as an assessee in default and is liable for the TDS not deducted along with interest under Section 201(1A).
• Interest and penalty on declarant — The declarant whose income exceeded eligibility will face demand for income tax on interest income, along with interest under Sections 234B and 234C for non-payment of advance tax.
• ITR scrutiny — AIS and Form 26AS data from banks is cross-verified by the Department with ITR filings. Large interest income reported by banks but not in the ITR — due to false 15G filing — is a primary trigger for scrutiny notices under Section 143(2).