A Comprehensive Guide to Form 15G and Form 15H: How to Save Tax on Interest Income
Introduction
Form 15G and Form 15H are essential documents that can help individuals save tax on their interest income. These forms are primarily used to declare that the individual’s total income is below the taxable limit and, therefore, no tax should be deducted at source (TDS) on their interest earnings. In this comprehensive guide, we will delve into the intricacies of Form 15G and Form 15H, explaining their purpose, eligibility criteria, and the step-by-step process of filling them out correctly.
Understanding Form 15G and Form 15H
Form 15G
Form 15G is a self-declaration form that can be submitted by individuals below the age of 60 years. By submitting this form, individuals can request that the institution paying them interest income refrain from deducting TDS. However, to be eligible to submit Form 15G, certain conditions must be met:
- Age criteria: The individual should be below 60 years of age.
- Taxable income limit: The total income for the financial year should be below the taxable threshold limit.
- Nature of income: The form is applicable only for certain types of income, such as interest from fixed deposits, recurring deposits, or savings bank accounts.
Form 15H
Form 15H serves a similar purpose as Form 15G but is specifically designed for senior citizens. Individuals who are 60 years of age or above can submit this form to avoid TDS on their interest income. The eligibility criteria for Form 15H are as follows:
- Age criteria: The individual should be 60 years of age or above.
- Taxable income limit: The total income for the financial year should be below the taxable threshold limit.
- Nature of income: Similar to Form 15G, Form 15H applies to specific types of income like interest from fixed deposits, recurring deposits, or savings bank accounts.
Steps to Fill Out Form 15G and Form 15H
Step 1: Obtain the form
You can obtain Form 15G and Form 15H from the bank, financial institution, or the income tax department’s official website. Ensure that you have the latest version of the form.
Step 2: Provide personal and financial details
Fill in the required personal details, such as name, address, PAN (Permanent Account Number), and contact information. Additionally, provide information related to the financial year for which the declaration is being made.
Step 3: Mention previous assessment year
Specify the assessment year for which you are making the declaration. It is important to note that the assessment year is one year ahead of the financial year.
Step 4: Declare previous year’s income
Provide details of your total income for the previous financial year, including interest income, salary, rental income, and any other applicable income.
Step 5: Mention the nature of income
Indicate the nature of the income for which you are submitting the form, such as interest income from fixed deposits, recurring deposits, or savings bank accounts.
Step 6: Sign and submit the form
Carefully read the declaration statement, sign the form, and submit it to the respective institution responsible for deducting TDS.
Conclusion
Form 15G and Form 15H play a crucial role in helping individuals save tax on their interest income by avoiding TDS deductions. By understanding the eligibility criteria and following the step-by-step process to fill out these forms accurately, you can ensure that your interest income remains tax-efficient. Always consult with a tax professional or financial advisor to determine your eligibility and seek guidance in case of any specific situations or changes in tax regulations.
Remember, staying informed and taking advantage of legitimate tax-saving opportunities is an integral part of managing your finances prudently. Fill out the appropriate form and enjoy the benefits of reduced tax liabilities on your interest income.
