As one of the most popular investment alternatives, fixed deposits offer guaranteed returns on your deposits. However, if you hold a fixed deposit at a bank, you may have known that a certain amount of tax is deducted on the interest you’re earning. It is earned by maintaining a specified amount of money in your savings account. As per Income Tax Act, 1961, if your income from bank interest surpasses a certain limit, your bank will deduct TDS.
However, if your overall income is less than the taxable threshold, you can submit Form 15G requesting the bank to not deduct any TDS on your interest income for that financial year. This article is focused on providing details on Form 15G and the tax benefits that can be availed under it. Click to know more about Form 15G.
What is the definition of Form 15G?
Form 15G can be defined as a self-declaration that you can submit to your bank to not deduct TDS from your income on the interest you have earned in that financial year. It is valid for a single financial year so you need to submit it every year to maintain non-deduction of TDS from your bank account. When filling out this form, you must have a PAN card.
Who is eligible to file Form 15G?
Form 15G requires certain eligibility criteria which are listed below. You can apply for the form if only you meet all of them.
- You need an Indian Resident individual or a part of a Hindu Undivided Family (HUF). Companies and firms are not allowed to fill the Form.
- You must be under the age of 60 years.
- Your overall income is taxed at zero percent.
- Your aggregate income from interest for that financial year must be less than the exemption limit. For the financial year 2021-22, it is set to Rs. 250,000.
How to fill up Form 15G?
You can easily get Form 15G on your bank’s online website. Or you can also download the pdf from the Income Tax Department’s official website.
The form is broken into two sections.
The first portion demands the assessee’s information, including his name, address, expected total income, nature of income, and section under which it is deductible, as well as assurance that, to the best of his or her knowledge, the information submitted is correct. The second part requires details of the individual with the tax liability – his unique ID, amount of income paid, and the date of the Form submission.
When filling out Form 15G, bear these things in mind.
- Only people under the age of 60 can apply.
- Make sure to double-check your details before submission.
- Don’t exaggerate your estimated earnings.
- You’ll need a copy of your PAN card for submission of the Form.
- Download the acknowledgment slip for future reference.
Please make certain that no false information is provided within the form. The Income Tax Act, Section 277 states it can result in a fine and even jail.
FAQs
Q. How do I compute TDS on Fixed Deposit interest?
A. The amount of TDS on Fixed Deposit interest is different for Indian Resident and Non-Resident individuals.
For Indian resident individuals, it is 10 percent on the earned interest.
For Non-resident individuals, it is 30 percent on the earned interest along with surcharges and taxes that may be applicable under Section 195.
If you fail to furnish your bank with your PAN card credentials as an Indian resident, the rate on interest collected in the financial year rises to 20%.
Q. What is the Form 15G submission deadline?
A. For the financial year of 2020-21, the deadline for the submission of Form 15G is June 31, 2021.
Q. Where should Form 15G be submitted?
A. You can submit the Form physically at your bank or online using your bank’s online website or app. If you decide to submit it at your bank, please note that you need to submit it at every branch where you receive interest on the fixed deposit.
Q. As a senior citizen, how do I apply for Form 15G?
A. Since individuals over 60 years are not eligible, senior citizens cannot apply for Form 15G. They can apply for Form 15H for the same.
Q. What’s the difference between Forms 15G and 15H?
A. The main distinction between the two forms is that Form 15H is for elderly persons, whilst Form 15G is for anyone under the age of 60.
Q. What is the meaning of “Estimated Total Income” in Form 15G?
A. “Estimated Total Income” in Form 15G means your aggregate income from all sources for the financial year.
Q. Why does Form 15G needs to be submitted every year?
A. Form 15G is valid for a financial year only so to keep TDS non-deductible from your bank account, it is necessary to submit the form every year.
