Banks are required to deduct Tax (TDS) @ 10 % if the interest earned on FD exceeds Rs 10,000 in a financial year.
However, if you meet certain conditions, you can submit Form 15G / Form 15H to the Bank & they will not deduct any TDS.
Read my post – How to avoid TDS on Bank FD.
Form 15G can be submitted by Resident, non-senior citizen investor if following conditions are fulfilled:
1) The final tax on his estimated total income should be NIL ; and
2) The aggregate of the interest etc. received during the financial year should not exceed the basic exemption slab
Form 15H can be submitted by Resident senior citizen investor if following condition are fulfilled:
1) The final tax on his estimated total income should be NIL ; and
Senior Citizen is person who is atleast 60 years of age at any time during the financial year.
Fresh forms are required to be filed each year. As incomes of investors may differ from year to year, the eligibility for furnishing the forms has to be ascertained every year.
NRIs are not eligible to submit Form 15G or 15H.
Download Form 15G / Form 15H
These forms are available in all Bank branches. You can also download it from link below –
Important Points to Note
1) Form No. 15G or 15H should be submitted at the beginning of the year so as to avoid a situation where bank has already deducted the tax before you submit the form. However in case the bank deducts the tax despite of the fact that you have submitted the form or before you actually submit the same, the bank will not refund the tax already deducted, as the bank would have already deposited the tax with the government. In such a situation the only option available with you is to file your income tax return and claim the amount of TDS a refund.
2) Form 15G and Form 15H have the validity of only one financial year. These forms are valid only for the financial year in which you have furnished these forms. If you want to apply for nil TDS in the new financial year, then you will have to resubmit these forms.
3) Form 15H or 15G are meant to prevent TDS and not to avoid tax or file your tax return. You may be required to file your tax return if your total income before the deductions is above the basic tax exemption limit.
4) Please ensure to submit your PAN details to the bank while submitting the Form No. 15G or 15H. In case you fail to include your PAN number to the bank, the bank will deduct TDS @ 20% against the applicable rate of 10% even if you have submitted Form No. 15G and 15H. Please take an acknowledgement from the bank for Form No. 15 G or 15H while submitting it.
