For many depositors in India, particularly retirees, students, and homemakers, fixed deposits and recurring deposits are a reliable means of saving money. Yet, every year, countless savers are surprised when their bank interest is reduced by tax deducted at source (TDS).
While this deduction is mandatory under the Income Tax Act, not everyone is actually liable to pay tax. Many people with modest or non-taxable incomes end up filing refund claims just to get back money unnecessarily deducted.
This is where Form 15G and 15H come in—two simple self-declarations that ensure eligible individuals don’t lose liquidity to unwanted deductions. Used correctly, these forms can make savings smoother and more tax-efficient.
Form 15G and 15H: TDS on Interest Income:
Banks, co-operative banks, and post offices are legally required under Section 194A of the Income Tax Act to deduct TDS on interest once it crosses a certain threshold in a financial year.
- ₹50,000 per year – for individuals below 60 years and HUFs.
- ₹1,00,000 per year – for senior citizens (60+ years).
- Rate of TDS – 10% with PAN, 20% without PAN.
Importantly, this threshold is applied to the aggregate interest earned from all deposits with one bank (or post office), not per account.
This ensures interest income is taxed at the source, but it can also penalize those with incomes below the taxable limit. For instance, a student earning ₹25,000 as annual FD interest may have no taxable income at all, but without filing a declaration, the bank would still deduct tax. This is exactly where Form 15G and 15H play a role.
Form 15G and Form 15H: Key Differences
At first glance, both forms serve the same purpose—preventing unnecessary TDS—but they apply to different categories of taxpayers.
- Form 15G: For individuals below 60 years and for HUFs.
- Form 15H: Exclusively for senior citizens (60+).
Basic exemption links:
- Below 60 years → ₹2.5 lakh
- Senior citizens 60–79 → ₹3 lakh
- Super senior citizens 80+ → ₹5 lakh
Example scenarios:
- A 25-year-old earning ₹30,000 in a digital fixed deposit interest but no other income → can submit Form 15G.
- A 68-year-old retiree earning ₹45,000 in annual bank interest but no pension → can submit Form 15H.
Both forms act as shields against TDS deduction for depositors with modest incomes.
How and When to Submit
Filing is simple but must be done carefully. The forms are available at all bank branches and post offices, and most institutions now allow e-submission via the internet and mobile banking apps. The best time to submit is at the start of every financial year so that TDS is not deducted from the very first quarter.
Key rules to remember:
- Submission is valid only for one financial year; you must renew annually.
- You must submit separately to each bank or branch where deposits are held.
- PAN is mandatory; without it, TDS will be deducted at 20% or the applicable rate, regardless of the form.
- Aadhaar may also be required for verification in some cases.
Done correctly, the process ensures your deposits remain intact throughout the year.
Common Misconceptions and Mistakes
This is one area where savers often go wrong:
- Myth: Submitting 15G/15H means no tax at all.
- Truth: It only prevents TDS. If your income later crosses the exemption limit, you still have to pay tax when filing returns.
- Myth: Filing once is enough for all banks.
- Truth: You must file separately with each bank or post office where deposits exist.
Mistake: Filing despite taxable income.
This is considered a false declaration and can lead to penalties.
Mistake: Overlooking joint accounts.
Each holder must file individually if eligible.
The golden rule is honesty—file only if you are genuinely below the taxable limit.
Why It Matters
With deposit rates rising in 2024–25, more savers are crossing the thresholds. For retirees, homemakers, and small savers, losing part of this income—even temporarily—can disrupt cash flow. Filing these forms ensures that liquidity is not compromised.
The good news is that digital filing has made compliance easier than ever before. What once required paperwork and branch visits can now be done with a few clicks on a banking app. This ease of access means that more depositors can protect their savings while staying compliant with tax rules.
Final Thoughts
Form 15G and Form 15H are not loopholes but compliance tools. They help ensure that people with genuinely non-taxable incomes are not subjected to unnecessary deductions. At the same time, they carry responsibility: depositors must file truthfully, renew annually, and remain mindful of their income levels.
With higher interest earnings and simplified digital processes in 2025, these forms matter more than ever. By understanding and using them correctly, depositors can safeguard their savings and enjoy a smoother financial journey without the hassle of reclaiming refunds later.
