Submit Form 15G and Form 15H to avoid TDS on FD, RD and Company Deposits
As per section 194A of Income tax, TDS or Tax Deducted at Source will be mandatory deducted on all interest payment from banks and financial institutions exceeding Rs. 10,000 in any financial year. Thus, bank will have to deduct tax when any customer receives more than Rs. 10,000 and will directly pay this tax to the government on the behalf of the customer.
New TDS Rule for Senior Citizen (Section 80TTB):
From 1st April 2018, a new section (80TTB) has been introduced. This allows a deduction of tax at source on interest income for senior citizens from Rs 10,000 to Rs 50,000.
Form 15G and Form 15H are self declaration forms, which is to be submitted by bank customer requesting his/her bank for non deduction of TDS for prescribed income on Fixed deposit and Recurring deposit. One can submit these forms only when Tax on your Total Income is nil. Also, your total interest income for the year is less than the minimum exemption limit of that year, which is Rs 2,50,000 (Less Than 60 Years Old); 3,00,000 for senior citizens (60 Years Old Or More but Less than 80 Years Old) and 5,00,000 for super senior citizens (80 Years Old Or More).
New Form 15G template
Form 15G is for Indian residents below 60 years of age.
New Form 15H template
Form 15H is for Indian residents above 60 years of age.
1. You will be penalized if you furnish wrong declaration on these forms or submitting even if you are not eligible to submit.
2. If your deposits are more than a year, you need to submit a fresh form 15 G/H for each financial year.
3. NRI’s cannot submit Form 15G / 15H.