With a fixed interest rate and attractive returns, Fixed Deposits are one of the most preferred investment options for most investors. However, the interest you earn from Fixed Deposit is fully taxable. Your financiers deduct TDS on your interest income, if it exceeds Rs. 10,000.
Form 15G and Form 15H can help you avoid the TDS, right at the start of the fiscal year.
What are Forms 15G and 15H?
When you invest in Fixed Deposits, you may get your interest payouts at maturity or at periodic intervals if you choose a Non-Cumulative Fixed Deposit. If the total interest amount you earn from FDs exceeds Rs. 10,000 for regular deposit holders and Rs. 15,000 for senior citizens, your financier needs to deduct the TDS as per Section 194A of Income Tax Act, 1961.
However, people who do not fall in the Income Tax bracket do not have to pay TDS on their interest income. In such cases, filing Form 15G/ 15H could help you. You simply have to file Forms 15G and 15H at the start of the fiscal year, with your financier.
How are Forms 15G and 15H different?
Forms 15G and 15H may have major similarities, but they differ in terms of their use cases. Here’s a lowdown to help you understand how to make most of Form 15G and Form 15H.
Form 15G – Form 15G is for regular investors, who are below 60 years of age. Form 15G can also be used by Hindu Undivided Families (HUF), trust and body of individuals. To be eligible to furnish Form 15G, here are some conditions to be fulfilled:
• The final tax on your estimated total income computed, as per provisions of the Income Tax Act.
• The aggregate of the interest income received during the financial year should fall in the basic exemption slab, for the relevant assessment year.
However, these forms cannot be submitted by an NRI, and need to be only submitted by an individual, and not companies.
Form 15H – You can furnish Form 15H if you meet the following conditions:
• You must be an individual and an Indian Resident
• You should be at least 60 years old
• The tax computed on your total income should be nil
Once you’ve met the required conditions for furnishing Forms 15G and 15H, you can start filling them. Are you wondering how to fill Form 15G or Form 15H? It’s easy. All you have to do is fill different fields in Form 15G and Form 15H, and make sure you attach your PAN copy with the declaration, while submitting the Forms to your financier.
These days, the processes have become simpler, so you can file these forms electronically without having to go about the arduous process of filling the forms physically.
Both Forms 15G and 15H are valid for 1 year, and should be submitted to your financier at the start of the year. You must ensure that your financier does not deduct the tax, before you furnish the forms, because the bank may not be able to refund it. To get your money back, you may need to file your ITR and claim a refund of your TDS amount.
Make sure you submit both these forms each year, so that you can get maximum assured returns on your FD.
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