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Usually, banks deduct TDS (Tax Deducted at Source) when the interest which is earned by a taxpayer exceeds INR 10,000. However, in case the total income of such taxpayer doesn’t exceed the taxable limit, such taxpayer can submit Form 15G to his or her bank requesting not to deduct TDS on his or her interest which he/she has earned in the financial year.

Here, interest income refers to the income earned by keeping a significant amount of money in a savings account. One can download Form 15 G from the bank’s website or by visiting the bank branch. It is important to note here that a PAN (Permanent Account Number) is compulsory while applying Form 15G. It is also important to keep in mind that Form 15G is only valid for one financial year and needs to be re-submitted every year. It’s advisable for the taxpayers to submit this form at the start of every financial year for avoiding any TDS deductions by the bank.

Conditions to fulfill before submitting Form 15G

The below-mentioned conditions should be met before submitting Form 15G.

  • The taxpayer could be an individual, an HUF (Hindu Undivided Family) or Trust, but not a company or a firm.
  • The taxpayer should be a resident of India.
  • Such taxpayer’s age shouldn’t exceed 60.
  • The total income tax of such taxpayer should be nil.
  • And lastly, the total interest income earned in the year shouldn’t exceed the basic exemption limit, which is INR 2.5 lakh for FY 2019-20 (AY 2020-21)

For those with income exceeding INR 5 lakh

Even if your gross total income exceeds INR 5 lakh and you intend to reduce it to INR 5 lakh or less by claiming various eligible deductions, you are still eligible to submit Form 15G. However, you need to keep in mind that when you submit Form 15G for avoiding TDS, your total income shouldn’t exceed the basic tax-exemption.

Let’s take an example to understand it better. For example, let’s assume the total income of a taxpayer from salary is INR 4.6 lakh, interest income from bank FD INR 50,000. The taxpayer has also made PPF investment of INR 50,000 and health paid insurance premium of INR 10,000 both of which are eligible for tax break under section 80C and section 80D respectively.

Particulars Amount
Income from Salary INR 4,60,000
Interest Income from FD INR 50,000
Gross Total Income INR 5,10,000
Deduction u/s 80C INR 50,000
Deduction u/s 80D INR 10,000
Net Taxable Income INR 4,50,000

From the example above, as the net tax liability of the taxpayer is zero (as per the provisions laid down in Budget 2020) and the total interest income doesn’t exceed INR 2.5 lakh, hence, the taxpayer is eligible to submit the Form15G.

How to fill Form 15G?

Once you have fulfilled all the required conditions relating to Forms 15G, you could start filling them. Here’s how:

  • Feed in the details in different fields in Form 15G
  • You need to attach a copy of your PAN with the declaration
  • Finally, submit the form to your bank.

If you wish to avoid arduous processes and long queues, consider filing the forms online.

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May 2024