When you place money in a fixed deposit, savings account, or other interest-bearing instruments, banks are required to deduct tax at source (TDS) if your interest income crosses a certain threshold. However, many individuals—especially those with total income below the taxable limit—end up losing money unnecessarily through TDS. To solve this, the Income Tax Department introduced Form 15G.
Form 15G is used for the purpose of declaring your annual taxable income as being below the limit so that no TDS should be deducted on your interest income. This saves you the hassle of claiming refunds later through an Income Tax Return (ITR).
What is Form 15G?
Form 15G is a declaration that can be filled out by fixed deposit holders and other income earners whose annual income is below the basic exemption limit. By submitting this form, they request the payer—usually a bank or financial institution—not to deduct TDS on their income.
It is essentially a self-declaration form to be filed & submitted by individuals, confirming that their taxable income falls below the threshold.
For example, if you earn ₹40,000 interest in a year & your total annual income is below ₹2.5 lakh (basic exemption limit), filing Form 15G ensures that banks will not deduct TDS at 10%.
Who Can Submit Form 15G?
The eligibility is clearly defined by the Income Tax Act.
- Individuals below 60 years of age with income below the exemption limit.
- Hindu Undivided Families (HUFs) can also submit Form 15G.
- Trusts & certain associations are eligible.
In simple terms, Form 15G is used by individuals below 60, Hindu Undivided Families (HUFs), and trusts to declare non-taxable income.
However, senior citizens (aged 60 & above) have to file a different form—Form 15H.
Key Uses of Form 15G
- Fixed Deposits – Form 15G is a declaration that can be filled out by fixed deposit holders to prevent TDS deductions.
- Recurring Deposits – Applicable for RD interest income too.
- Post Office Deposits – Some schemes also require declaration for avoiding TDS.
- Corporate Bonds & Other Investments – If income is below taxable limit, Form 15G can be used.
In all these cases, the primary purpose remains the same: to declare annual taxable income below the threshold so that no TDS should be deducted on your interest income.
Also Read: Rectification of Mistake Simplified
How to Fill Form 15G
The form is simple but must be filled carefully. Common details required include:
- Name, PAN, and Date of Birth.
- Residential status (must be Indian resident)."
- Declaration of estimated income for the financial year.
- Previous year’s income details.
As it is a self-declaration form to be filed & submitted by individuals, it must be signed by the taxpayer. Any false declaration may attract penalties.
When Should You Submit Form 15G?
The right time to file Form 15G is at the beginning of the financial year. This ensures the bank or payer doesn’t deduct TDS at all during the year.
However, you can also submit the form at any time, and the payer will stop deducting TDS from that point onward.
But note: If TDS has already been deducted, Form 15G cannot reverse it. You’ll need to claim a refund via ITR filing.
Example Scenario
Let’s say Meera, a 28-year-old professional, has invested in fixed deposits & earned ₹35,000 interest in a financial year. Her total annual income is ₹2.2 lakh, which is below the taxable limit.
If she does not submit Form 15G, the bank will deduct 10% TDS (₹3,500). Later, Meera would need to file an ITR to claim this back.
By filing Form 15G for the purpose of declaring annual taxable income, Meera ensures that no TDS should be deducted on her interest income in the first place.
Also Read: Special Tax Relief for Returning NRIs
Difference Between Form 15G and Form 15H
- Form 15G – Used by individuals below 60, HUFs, and trusts.
- Form 15H – Designed for senior citizens (60 years & above).
Both are self-declaration forms to be filed & submitted by individuals confirming that their taxable income falls below the exemption limit.
Important Points to Remember
- Always quote your Permanent Account Number (PAN) correctly. Without it, the declaration is invalid.
- Submit the form separately for each bank or institution where you earn income.
- Ensure your income genuinely falls below the exemption limit. False declarations can attract penalties under the Income Tax Act."
- Submit a new form every financial year. Old declarations are not carried forward.
Why is Form 15G Important?
- Prevents unnecessary deduction of TDS.
- Saves time & effort in filing refunds.
- Provides relief for low-income taxpayers.
- Ensures fair compliance without overburdening individuals.
In today’s world where even small interest incomes are subject to tax deduction, Form 15G acts as a valuable safeguard for individuals below the taxable income limit.
Also Read: The Declaration That Saves Senior Citizens from TDS
Conclusion
Form 15G is used by individuals below 60, Hindu Undivided Families (HUFs), and trusts to declare that their annual taxable income is below the basic exemption limit. It is most commonly filed by fixed deposit holders & other small taxpayers to ensure no TDS should be deducted on their interest income.
In short, Form 15G is a self-declaration form to be filed and submitted by individuals who wish to simplify their tax compliance. By using this provision, taxpayers can avoid unnecessary deductions & keep more money in their pockets.
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