According to Section 194A of the Income Tax Act, the interest earned from bank accounts and other deposits is subject to TDS. This TDS is deducted if the interest earned exceeds the exemption limit for the financial year.
Therefore, senior citizens can submit Form 15H to ensure no TDS is deducted from the interest earned from fixed deposits (FDs), recurring deposits (RDs), and other savings schemes. This is only applicable if the interest income earned is within the tax limit. The limit on total interest earned for the financial year is Rs. 50,000 for senior citizens aged 60 years and above.
What is Form 15H?
Form 15H is a self-declaration form to be filed and submitted by senior citizens (aged 60 years or older) to ensure that banks or financial institutions do not deduct TDS on the interest income earned or accrued in a financial year. This form is used when the individual’s estimated total income is below the basic exemption limit (i.e., ₹3,00,000 or ₹5,00,000, as applicable) and there is no tax liability in that particular year.
Key Points About Form 15H:
- Eligibility: Only for senior citizens (60 years or older).
- Interest Income Criteria: The estimated total interest income should be below the basic exemption limit.
- Purpose: Prevents the deduction of TDS on interest income if the total income is below the taxable limit.
- Validity: Valid for one financial year and needs to be submitted every year if the criteria are met.
- Provisions of the Income Tax Act: Financial institutions and other organizations must deduct TDS while crediting interest income to an individual’s account if the amount exceeds INR 50,000 for senior citizens.
What is Form 15H of the Income Tax Act?
Form 15H of the Income Tax Act is a self-declaration form for senior citizens (aged 60 years and above). It must be submitted to avoid tax deducted at source (TDS) on interest income if it is below the exemption limit. TDS is deducted if the interest earned is more than the exemption limit. For example, the limit is Rs. 40,000 (for individuals aged below 60 years) and Rs. 50,000 (for senior citizens aged above 60 years).
For total income, the basic exemption limit for senior citizens (aged 60 years and above till 80 years) is ₹3,00,000, while for super senior citizens (aged 80 years or above), it is ₹5,00,000 for the financial year 2023-24.
Form 15H can be submitted online to banks, non-banking financial companies (NBFCs), or financial institutions where the person has a deposit through the official websites or offline at the branch. However, submitting your PAN card details along with this form is mandatory.
Importance of Form 15H for Senior Citizens
Senior citizens can use this form to avoid TDS liability on interest earned from investments and deposits. As mentioned earlier, TDS is not deductible if the interest income earned from these deposits and investments for the financial year is within the limit of Rs 50,000 for senior citizens (60 years and above). This form has to be submitted only once a year.
For instance, if you are a senior citizen with no source of income (other than income from interest on deposits), you can submit Form 15 to the banks, NBFCS, and financial institutions where the deposit is held.
Who is Eligible to Submit Form 15H?
- The individual needs to be a resident citizen of India.
- Form 15H is specifically for senior citizens (aged 60 years and above). For individuals below the age of 60 years, Form 15G must be submitted.
- The total taxable income for the financial year must be below the basic exemption limit. The current limit on total interest earned for the financial year is Rs. 50,000 for senior citizens aged 60 years and above.
- Form 15H for senior citizens needs to be submitted to each bank, NBFC, or financial institution where the person holds a deposit that earns interest.
Uses of Form 15H
Form 15H can be used for several purposes. These are listed below:
- TDS on Interest Earned on Bank FDs: Submitting Form 15H to the bank, NBFC, or financial institution where the senior citizen holds a fixed deposit(s) can help save taxes on interest earned.
- TDS on Interest Earned on Post Office Deposits: Senior citizens can submit Form 15H to the post office to ensure no tax is deducted at source on deposits.
- TDS on Interest Earned on Corporate Bonds: TDS also applies to any income exceeding Rs. 5,000 earned annually from corporate bonds. However, senior citizens can submit Form 15H to the issuer to request an exemption from TDS, provided they meet the necessary criteria.
Details to be Filled in Form 15H
- The declarant’s name
- Address of the applicant
- PAN of the applicant
- Age
- Income information for which the declaration needs to be made
- Self-declaration
- Signature and date of submission
Difference Between Form 15G and Form 15H
Form 15G vs Form 15H | |
Form 15G | Form 15H |
Individuals below the age of 60 can submit Form 15G. | Only senior citizens (those aged 60 or above) can submit Form 15H. |
It must be submitted to avoid TDS on interest income if it is below the exemption limit of Rs. 40,000. | It must be submitted to avoid TDS on interest income if it is below the exemption limit of Rs. 50,000. |
NRIs can submit Form 15G upon meeting all the eligibility criteria. | NRIs are not eligible to submit Form 15H. |
A Hindu Undivided Family (HUF) can submit Form 15G. | Form 15H cannot be submitted by an HUF. |
FAQs
What is the use of Form 15H?
Form 15H provides tax exemptions on deposits in banks, NBFCs, and other financial institutions for senior citizens (aged 60 years and above) if the interest earned from these deposits is within the exemption limit.
What is the income limit for Form 15H for senior citizens?
The basic income exemption limit of Form 15H for senior citizens (aged 60 years and above) is ₹3,00,000, while for super senior citizens (aged 80 years or above), it is ₹5,00,000 for the financial year 2023-24.