These are the forms submitted by fixed deposit holders to a relevant financial entity like a bank at the beginning of a financial year. It helps in avoiding TDS on the interest earned on the deposit amount. Other than this, did you know that these forms can also be submitted if your income exceeds INR 2.5 lakh, but going by some conditions? Read on to know how.
Eligibility for Form 15G/15H Submission
TDS Form 15G/15H is required to submit to the financial institutions i.e banks to avoid TDS deduction on the interest income on FDs. if the interest income crosses the threshold limit. Those who reside in India and age below 60 years of age during the year as mentioned in the form can submit Form 15G. On the other hand, a resident individual with age 60 years and above i.e senior citizens and super senior citizens are liable to submit Form 15H.
Moreover, an individual with zero tax liability can also submit this form. The tax payable for any taxpayer is calculated on the net taxable income which is mentioned as the total income in the Form 15G/Form 15H and it is mandatory for an individual to declare his/her total income.
For FY2019-20, the taxable income for no tax payable is up to INR 5 lakh. Those who have total income in the mentioned criteria can submit the Form 15G/ Form 15H, as applicable. As per the wording of the form the total income of an individual should be mentioned which will be an estimated value where tax payable is zero. However, the total income on the form is the net taxable income post claiming all the deductions available to the person.The same criteria for a full tax rebate on taxable income up to INR 5 lakh in a financial year were announced in the Interim Budget 2019.
Conditions for Individuals with Taxable Income Above INR 5 lakh
If a person has gross total income above INR 5 lakh and he/she is willing to bring that amount low by INR 5 lakh or little less by claiming eligible deductions. He/she will be able to submit Form 15G/Form 15H. Albeit, one thing that should be kept in mind by an individual while submitting the form to avoid the deduction of tax that the total income should not above the basic tax-exemption. An Indian resident with age below 60 years has the basic exemption limit of INR 2.5 lakh.
Form 15G or 15H for Senior Citizens
The condition of income not exceeding the basic exemption limit is not applicable for the senior citizens. It is applicable only for individuals eligible for submitting Form 15G and nor for those who are eligible for submitting Form 15H. The basic tax-exempt income level for senior citizens (aged 60 years or in between 60-80 years) is INR 3 lakh for FY 2019-20. While the super senior citizens with age 80 years and above will be benefited with the basic tax-exempt limit level of INR 5 lakh for the mentioned fiscal.
Read also: Due Date of TDS Form 15G and 15H
The Form 15H is governed by Section 197A (1C) of the Income Tax Act and is applicable for senior citizens. The form says a senior citizen with the income for which exemption is being claimed crosses exemption threshold (i.e., INR 3 lakh or INR 5 lakh, as applicable) is eligible to fill the form. Also, after claiming all the applicable deductions the net income should be below the applicable exemption limit. And, the banks verify the tax liability on total income should be nil.
Therefore, the senior citizen and super senior citizens are eligible for submitting Form 15H only when the interest income earned on FDs does not exceed the basic exemption limit as applicable to them.
Moreover, an individual with zero tax liability can also submit this form. The tax payable for any taxpayer is calculated on the net taxable income which is mentioned as the total income in the Form 15G/Form 15H and it is mandatory for an individual to declare his/her total income.
For FY2019-20, the taxable income for no tax payable is up to INR 5 lakh. Those who have total income in the mentioned criteria can submit the Form 15G/ Form 15H, as applicable. As per the wording of the form the total income of an individual should be mentioned which will be an estimated value where tax payable is zero. However, the total income on the form is the net taxable income post claiming all the deductions available to the person.The same criteria for a full tax rebate on taxable income up to INR 5 lakh in a financial year were announced in the Interim Budget 2019.
Conditions for Individuals with Taxable Income Above INR 5 lakh
If a person has gross total income above INR 5 lakh and he/she is willing to bring that amount low by INR 5 lakh or little less by claiming eligible deductions. He/she will be able to submit Form 15G/Form 15H. Albeit, one thing that should be kept in mind by an individual while submitting the form to avoid the deduction of tax that the total income should not above the basic tax-exemption. An Indian resident with age below 60 years has the basic exemption limit of INR 2.5 lakh.
Form 15G or 15H for Senior Citizens
The condition of income not exceeding the basic exemption limit is not applicable for the senior citizens. It is applicable only for individuals eligible for submitting Form 15G and nor for those who are eligible for submitting Form 15H. The basic tax-exempt income level for senior citizens (aged 60 years or in between 60-80 years) is INR 3 lakh for FY 2019-20. While the super senior citizens with age 80 years and above will be benefited with the basic tax-exempt limit level of INR 5 lakh for the mentioned fiscal.
Read also: Due Date of TDS Form 15G and 15H
The Form 15H is governed by Section 197A (1C) of the Income Tax Act and is applicable for senior citizens. The form says a senior citizen with the income for which exemption is being claimed crosses exemption threshold (i.e., INR 3 lakh or INR 5 lakh, as applicable) is eligible to fill the form. Also, after claiming all the applicable deductions the net income should be below the applicable exemption limit. And, the banks verify the tax liability on total income should be nil.
Therefore, the senior citizen and super senior citizens are eligible for submitting Form 15H only when the interest income earned on FDs does not exceed the basic exemption limit as applicable to them.
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