Form 15G and Form 15H – A Smart Way to Avoid TDS Legally

Tax Deducted at Source (TDS) is a system where tax is collected in advance by the income payer, especially on interest income. But what if you’re not actually liable to pay tax?

Instead of letting TDS reduce your income and then filing for a refund later, eligible taxpayers can legally avoid TDS by submitting Form 15G or Form 15H at the start of the financial year.

Let’s break down what these forms are, who can use them, and how they work.

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Table of Contents

1. What Are Form 15G and Form 15H?
2. Eligibility Criteria
3. When and Where to Submit
4. Documents Required
5. Form 15G vs. Form 15H – Quick Comparison
6. Legal Provisions
7. Caution: Misuse Can Attract Penalty
8. FAQs
9. Conclusion

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What Are Form 15G and Form 15H?

Form 15G and Form 15H are self-declaration forms under Section 197A of the Income Tax Act. These are submitted by eligible individuals to avoid deduction of TDS on certain incomes such as:

• Interest on fixed deposits (FDs) and recurring deposits (RDs)
• Interest from post office time deposits
• Interest on corporate bonds
• Dividend income (if applicable)
• EPF withdrawals before 5 years, if above ₹50,000

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Eligibility Criteria

Form 15G

• For individuals below 60 years and HUFs
• Must satisfy both conditions:
  1. Total income is below ₹2.5 lakh
  2. Estimated tax liability is nil

Form 15H

• For resident individuals aged 60 years or more (senior citizens)
• Can be submitted if:
  1. Total income is below the exemption limit (₹3 lakh or ₹5 lakh after Section 87A rebate)
  2. No tax is payable

Even if interest income exceeds ₹50,000, senior citizens can still submit Form 15H as long as the overall taxable income is within the exemption limit.

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When and Where to Submit

Submit Form 15G or 15H at the beginning of the financial year (April) to avoid any TDS throughout the year.

These forms should be submitted to:

• Banks
• Post offices
• EPF authorities
• Companies (for bond interest)
• Mutual funds (if dividends are applicable)

Late submission won’t reverse TDS already deducted. It will only stop further deductions for the remaining year.

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Documents Required

• PAN (mandatory)
• Estimated total income details for the financial year
• Properly filled and signed Form 15G/Form 15H

If PAN is not furnished, TDS will be deducted at a higher rate of 20%, even if you submit Form 15G or 15H.

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Form 15G vs. Form 15H – Quick Comparison

Feature	Form 15G	Form 15H
Applicable to	Individuals below 60 years, HUFs	Individuals 60 years and above
Income threshold	₹2.5 lakh	₹3 lakh or ₹5 lakh (after rebate)
Tax liability	Must be nil	Must be nil
Validity	One financial year	One financial year

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Legal Provisions

These forms are governed by Rule 29C of the Income Tax Rules and backed by Section 197A of the Income Tax Act, 1961. Filing them truthfully allows eligible individuals to legally avoid TDS.

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Caution: Misuse Can Attract Penalty

Submitting Form 15G or 15H when you are not eligible is an offence.

• False declarations can lead to penalty or prosecution under Section 277
• If caught, punishment may include imprisonment or fine
• Always ensure your income is genuinely below the taxable limit
• File your Income Tax Return (ITR) if it is applicable to your case

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FAQs

Can NRIs submit Form 15G or 15H?
No. These forms are only for resident individuals and resident HUFs (Form 15G).

What if I forget to submit the form?
If TDS has already been deducted, you can still claim a refund when filing your ITR.

Can I submit the form online?
Yes. Most banks now offer online submission through their net banking portals.

Do I need to submit these forms every year?
Yes. These forms are valid only for one financial year, so you must re-submit them annually.

Can I submit Form 15H even if my interest income is above ₹50,000?
Yes. If your total income is still within the exemption limit and your tax liability is nil, you can use Form 15H.

Can I use Form 15G or 15H for salary or rent income?
No. These forms are only applicable for specified incomes like interest, EPF withdrawal, and dividends. They cannot be used for salary, rent, or professional payments.

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Conclusion

Form 15G and Form 15H provide a simple and legal way to avoid unnecessary TDS if your total income is not taxable.

By using these forms smartly:

• You receive your income without deductions
• You avoid the hassle of claiming TDS refunds
• You maintain compliance with income tax regulations

However, these forms should never be misused. Always evaluate your total income and tax status carefully before submission.