While taxation forms the basis of revenue for the Government of India, you also get an exemption if your total income remains below the minimum taxable slab. Above this, individuals need to pay income tax as per the applicable rate on respective income slabs. To streamline the process of tax collection and make it more efficient, the government introduced TDS or Tax Deducted at Source. It is applicable on specified income generated through listed investments and is deducted at the point of income generation.
However, individuals whose total income is not taxable can save on TDS if it has been deducted for such incomes. You can do so by filling up forms 15G and 15H and submitting it to the respective authority. However, the two forms are not the same, and people often confuse about the difference between form 15G and 15H. So, let’s understand the two forms, their use and how they are different from each other.
Form 15G and 15H – An overview
If you have income generated on investments that classify for TDS like fixed deposits, you need to fill out either form 15G or form 15H and submit to the concerned financial institution. It ensures that TDS is not deducted from your interest income received from such investment. You may submit these forms either online or offline, as per your convenience.
Since these forms are valid only for a year, you need to submit them at the beginning of every financial year to avoid deductions.
Difference between form 15G and 15H – What you should Know
The primary difference between form 15G and 15H is that the former is used by people below 60 years of age to save on TDS. The latter is used by senior citizens to avoid TDS deductions. Therefore, both types of applicants can utilize the benefits of form 15G or 15H for Fixed Deposit or other applicable investments.
Now, take a look at the conditions required for filling out these two forms.
Submitting form 15G – Conditions that you need to fulfill
To be eligible to fill Form 15G and submit you need to meet the following conditions:
- You must be either an individual, a Hindu Undivided Family, a body of individuals like a trust or other assesse to fill up this form. A company or a firm is not eligible to submit it.
- You must be an Indian resident to apply with it.
- Your tax calculation on the total income for the current financial year must be nil.
- The interest income earned in an assessment year should not exceed the exemption limit. For the assessment year 2020-21, the basic exemption limit is Rs. 2.5 Lakh.
Also, Read This: What Are All the Types of Bank Deposits?
Submitting Form 15H – Conditions you need to meet
An assesse must fulfill the conditions given below to be eligible to submit form 15H:
- Must be an individual and a resident of India.
- Must have attained 60 years of age in the financial year for which he/she is submitting the form.
- The tax calculated on total income should be nil for the given financial year.
Save TDS on investments like EPF, post office deposits, rent, fixed deposit, etc. with either of the forms as per your eligibility.
With proper planning of investments in schemes like fixed deposits, you can not only avoid paying TDS but also earn interest income based on the type and tenor you choose. Using fixed deposit EMI calculator to estimate the interest earned as per the current interest rates at the tenor’s end will help you decide the investment amount. You may also look to earn higher returns with Bajaj Finance Fixed Deposit.
Make sure you match the eligibility criteria for applying with either of the forms. As per the difference between form 15G and 15H, it is necessary to submit the right one to save on TDS.