Section 194A of Income Tax Act, 1961
All Banks are required to deduct TDS on interest payments made to its account holders when the interest amount is in excess of INR 10,000.
What is Form 15G and Form 15H?
Form 15G & Form 15H are self-declaration forms required to be furnished by a person who is in receipt of interest on FD (Fixed Deposit)/ RD(Recurring Deposit) from his bank.
It is submitted to enable bank not to deduct TDS on interest payment.
When to submit?
It is suggested to submit the Form 15G/15H in the Apr month every year. However, it can be submitted to Bank at any time of the year. But submit it before the bank deducts TDS. Once TDS deducted, it will not be reversed by bank. But you can always get refund from Income Tax Department.
In which situations it can be submitted?
If the estimated interest on your FD and RD is more than INR 10,000 for any financial year and your total income for that financial year is less than the maximum amount not taxable.
Maximum amount not taxable is given below:
a. Individual less than 60 years of age – INR 2,50,000
b. Individual having age 60 years or more at any time during the year but less than 80 years on the last day of the year – INR 3,00,000
c. Individual having age 80 years or more at any time during the previous year – INR 5,00,000
Besides above, he/ she would not have paid any tax in previous financial year on his/ her income.
If all the above conditions are satisfied, one can submit the declaration in Form 15G (applicable in case of individual having age less than 60 years) or 15H (applicable in case of individual having age of 60 year or more) in duplicate to the bank and bank will give an acknowledgement to the person. Form 15G and 15H are available at all branches of all banks.