As per studies, more than 95% of individuals prefer to invest in fixed deposits than in stocks, equity, mutual funds or other investment options.
While you invest in FDs, the financial company or NBFC may deduct a certain amount as TDS. Your FD will attract TDS provided the total interest income in a year is more than Rs. 10,000. However, you only have to pay tax if your income is taxable.
To avoid paying TDS on your FD if you income is non-taxable, you have to submit Form 15G or Form 15H. Given below are brief details with which you can understand what is Form 15G and Form 15H.
Form 15G
Form 15G is a declaration that you (as a depositor) submit to the financial company to ensure that TDS is not deducted on the interest income earned on your FD. This form is one of the hacks to help you save money and make money at once.
Form 15G PDF download can be done from the official website of your financial institution or NBFC. Alternatively, you can also download the form from the official portal of the Income Tax Department.
What is form 15G – Highlights and features
The structure of this form has gone several changes in the financial year 2015 to ease the burden of both the tax deductee and deductor.
This form has to be submitted by individuals below the age of 60 years. Senior citizens can avoid paying TDS on fixed deposits by submitting Form 15H at the end of each financial year.
Fixed deposits are considered as one of the best investment schemes as they come with guaranteed returns. Moreover, competitive interest rates, liquidity, etc. are some additional benefits that make FDs one of the best investment schemes that you should invest in to plan your post-retirement life. One must always remember to submit the 15G form each financial year to avoid unnecessary deductions at the time of maturity of the FD.
Eligibility criteria
To be able to file Form 15G you are required to meet its eligibility criteria as mentioned below. To fill this form, you should be –
- Below the age of 60 years
- A resident of India
- An individual and not any company or firm
What is form 15G documentation process?
You are required to submit your Aadhaar card and PAN card along with other financial documents and residential proof while you fill up your form. The documentation process of such deductions is minimal, which is one of the benefits of form 15G or 15H for fixed deposits.
How to fill Form 15G?
To fill up form 15G for fixed deposit, you will have to provide your name as mentioned in your PAN card along with your residential details and your contact details.
You will also have to provide declarations that you are an individual and not any company or firm. Additionally, a declaration to ensure that you are not an NRI and a resident Indian is also required to be submitted. After you have filled your form, you can click on ‘Form 15G PDF download’ option to keep a digital copy for your future reference.
In case of senior citizens the amount received as interest is exempted from tax, and they can claim their TDS deductions using form 15H. Now that you have learned what is form 15G and form 15H, you can calculate the interest amount earned using an FD calculator and estimate the TDS amount.
For instance, if you hold a fixed deposit account at a financial agency like Bajaj Finance Ltd, you would require the knowledge of form 15G and form 15H to save TDS (Tax Deduction at Source) on your income earned as interest.
You will have to submit these forms at the end of each financial year. In case you fail to submit form 15G or form 15H to claim TDS exemptions, you can avail the deductions while filing your income tax returns. In such cases, the interest amount will be added to your gross annual income and the tax amount will be calculated accordingly.
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