Income Tax Form 15G and 15H

What is Form 15G/15H?

Form 15G/ 15H is used to make sure that TDS is not deducted from your income if you meet certain conditions as mentioned below. You can submit these forms to the deductor who deducts TDS on your income.

The best use case is that of Banks. Banks deduct TDS @ 10% if your interest income from deposits exceeds INR 10,000 (INR 50,000 in the case of senior citizens). If your total income is not taxable then you can submit the Form 15G /15H to banks so that they don’t deduct TDS from your interest income. Some of the banks provide the facility to upload Forms online through their website as well.

Form 15H is for senior citizens who are 60 years or elder and Form 15G is for a non-senior citizen. It is to be filed every financial year at the beginning of the year.

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What are the conditions for filing Form 15G/ 15H?

Below are the conditions for filing Form 15G:

  • Your age is less than 60 years,
  • ​You are a Resident Individual or HUF,
  • Tax Calculated on your Total Income is zero,
  • Total Interest income is less than the basic exemption limit of that particular year.

The conditions for filing Form 15H are the same as above except the condition that their age should be of 60 years or above.

Age of the individual Basic Exemption Limit (INR)
Below 60 2,50,000
Between 60 and 80 3,00,000
More than 80 5,00,000
From FY 2020-21 onward TDS will be deducted @10% on Dividend Income above INR 5,000. Treaders can submit Form 15G/Form 15H to the deductor to avoid TDS Deduction.
Tip
From FY 2020-21 onward TDS will be deducted @10% on Dividend Income above INR 5,000. Treaders can submit Form 15G/Form 15H to the deductor to avoid TDS Deduction.

Let’s take an example to understand better:

 

Particulars

Anjana

Rahul

Gautam

Pravin

Age

25

50

70

65

Residential Status

Resident of India

Resident of India

Non-Resident of India

Resident of India

Salary Income / Pension Income

2,70,000

0

0

1,50,000

Interest Income

10,000

2,60,000

85,000

20,000

Total Income

2,80,000

2,60,000

85,000

1,70,000

Deduction under Section 80

40,000

50,000

0

0

Total Taxable Income

2,40,000

2,10,000

85,000

1,70,000

Basic Exemption Limit

2,50,000

2,50,000

3,00,000

3,00,000

Form 15G/15H eligibility

Yes

No

No

Yes

Reason

Anjana can submit Form 15G Since the tax calculated is zero and interest income is less than the basic exemption limit

Rahul cannot file Form 15G. Even Though the tax calculated is zero because his interest income exceeds the basic exemption limit (INR 2,50,000)

Gautam cannot file Form 15H since he is not a resident Indian 

Pravin can file Form 15H since his tax calculated is zero and interest income is less than the basic exemption limit (INR 3,00,000)  

How to file Form 15G & Form 15H?

Form 15G/ Form 15H is used to make sure that TDS is not deducted from your income. If your tax liability for a year is zero then you can file these forms with the deductor. These can be filed in the following two manners:

1. Physical Submission

  • You can Download Form 15G/ 15H
  • Fill the form and submit it to the deductor in paper form.

2. Online Submission

  • Go to the website of the deductor i.e, Bank’s website.
  • Log in to your account,
  • Fill the Form 15G/ 15H and submit.

Details required

  • PAN
  • Residential Status
  • Address Details
  • Contact Information
  • Estimated Income Details
  • Previously Filed Form 15G/ 15H Details

When should Form 15G / Form 15H be submitted?

The forms should be submitted for the following income source when TDS is deducted on:

  • EPF withdrawal: TDS is deducted when you withdraw from the EPF account before 5 years of continuous services. So if you have not completed 5 years of service and you are planning to withdraw your EPF balance for more than INR 50,000 (Effective from 1st June 2016. Earlier the limit was INR 30,000), you can save yourself from TDS by submitting Form 15G /15H.
  • Rent: If your rental income for a year exceeds INR 2,40,000 (INR 1,80,000 till FY 2018-19), TDS is deducted by the tenant. However, if your total income including rent is not taxable then you can submit Form 15G / 15H to the tenant to save yourself from TDS deduction.
  • Interest income from FDs with Banks / Post office: If your total income including the interest from deposits is not taxable, you can submit Form 15G / 15H to the Banks /Post office, requesting them not to deduct the TDS from your interest income.
  • Corporate Bonds: If your interest income from corporate bonds is more than INR 5000 then TDS is to be deducted from the same. You can submit form 15G / 15H to the issuer asking him not to deduct the TDS.
  • Insurance Commission: Earlier if the insurance commission earned by the agent exceeded Rs. 15,000 then TDS used to get deducted from it. But from FY 2017-18 insurance agents can also submit Form 15G/ 15H for non-deduction of TDS if the tax on their total income is zero.
  • Dividend Income: Earlier there was no TDS on Dividend Income due to DDT (Dividend Distribution Tax). But from FY 2020-21, TDS @ 10% will be deducted on dividend income if it is more than INR 5,000. However, a trader can submit Form 15G/ 15H for non-deduction of TDS if the tax on their total income is zero.

FAQs

Do I have to submit Form 15G / 15H to all the branches of the bank where I have deposits?

Yes, you will have to submit Form 15G / 15H to all the bank branches where you have deposits.

Can NRIs file Form 15G / 15H?

No. Form 15G / 15H can only be filed by an Indian Resident.

Can HUF file Form 15G / 15H?

Yes. If the HUF meets all the conditions mentioned above, then it can submit Form 15G / 15H to the deductors.

Will my interest income become tax-free if I file Form 15G/ 15H?

No. Submission of Form 15G/ 15H does not mean that your income is tax-free. It only means no TDS will be deducted on such income by the deductor. You still need to show the same as income while filing your ITR.

When to submit Form 15G/ 15H?

Form 15G/15H needs to be submitted at the beginning of the financial year. Thus the deductor shall not deduct TDS while filing quarterly TDS returns during the year.

Who can submit Form 15G?

Any resident Individual/HUF who is not a senior citizen can file Form 15G to the deductor if their total income is less than INR 2,50,000.

Who can submit Form 15H?

Any resident Individual/HUF being a senior citizen can file Form 15H to the deductor if their total income is less than INR 2,50,000.

Sukanya Samriddhi Yojana – Features, Registration and Benefits

Sukanya Samriddhi Yojana is aimed at the betterment of girl child in India. It is a savings scheme to cover girl child education and wedding expenses. The scheme offers income tax deductions on savings and fixed interest rates against the deposits.

Features of Sukanya Samriddhi Yojana

  • Rate of interest of 7-8% per annum which is more than any other government scheme
  • Investments are exempt from income tax under section 80C of the Income Tax Act
  • The opening amount for the account is INR 1,000. Thereafter multiples of INR 100 can be deposited in the account with a minimum of INR 1,000 per year
  • The maximum limit for deposits in the account is INR 1,50,000 per year
  • If a minimum of INR 1000/- is not deposited in a financial year, an account will be discontinued and can be revived with a penalty of INR 50/- per year along with the minimum amount required for a deposit for that year
  • If the account is not closed after maturity, a balance will continue to earn interest as specified for the scheme from time to time
  • Normal Premature closure will be allowed after completion of 18 years /provided that girl is married. The maturity period of the account is 21 years from the date of opening the account
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Who is Eligible to Open an Account under Sukanya Samriddhi Yojana?

The following are the eligibility criterias for openining an account:

  • Account under Sukanya Samriddhi Yojana has to be opened under the name of girl child
  • The parents or legal guardians can open the account in the name of the girl child
  • At the time of opening the account the girl has to be below the age of 10
  • One cannot open multiple Sukanya Samriddhi accounts for the same girl child
  • Two accounts for two girls can be opened in one family
  • The girl child has to be a resident Indian

How to open an Account for Sukanya Samriddhi Yojana?

An account can be opened at any of the authorized banks or at any post office. Form to open an account is available at all eligible bank branches and post office branches.

Documents required to open Sukanya Samriddhi Account:

  • Account Opening Form
  • Birth Certificate of Girl Child
  • Identity Proof for both Girl Child & Parent or Legal Guardian
  • Address Proof of depositor

What are the Tax Benefits available under SSY?

The investments made under Sukanya Samriddhi Yojana fall under the EEE (Exempt, Exempt, Exempt) Category. This means that contribution up to INR 1.5 lakh is deductible under section 80C, the interest that is earned as well as the maturity amount all are exempted from tax.

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Transfer of Sukanya Samriddhi Account

One of the major benefits of SSY is the ease of convience. One can transfer their SSY account from one part of the country to another without any hassel. One only needs to fill out and submit the transfer request form to the concerened post office or bank.

FAQs

How can my Sukanya Samridhdhi Yojana account get deactivated/inactive?

The Sukanya Samriddhi account will turn inactive in case the requirement of the minimum annual deposit of Rs 1,000 is not met.

How many times can I deposit in Sukanya Samriddhi Yojana?

The amount deposited in Sukanya Samriddhi account should not exceed Rs. 1.5 lakhs per year. However, the total number of deposits that you have made doesn’t matter either in a month or financial year.

Can Sukanya Samriddhi Yojana account be closed prematurely?

Yes, it is possible. Following are the circumstances where your account can be closed prematurely:
– It can be closed prematurely on the basis of marriage, change of citizenship and country of residence, only after maintaining deposits for 5 years. 
– It can be prematurely closed in case the account is causing a financial burden on the girl child or there is an urgent medical requirement or in instances of death of a parent or guardian.

Am I allowed to take a loan against the amount in Sukanya Samriddhi Yojana?

No, currently you are not allowed to avail a loan against your SSY balance.

If I forget to pay the minimum amount will there be a penalty charged?

Yes, a penalty of INR 50 will be charged if you miss contributing the minimum amount of INR 250 in a financial year.

What will happen in case of an unforseen death of the depositer?

In case of unforseen death of the depositor, the account is either closed and the accumulated amount is given to the family or girl child. Or, the account is kept running till the maturity period and the deposited amount continues to earn interest till the girl child attains the age of 21 years.

NSC ( National Savings Certificate ) – Features, Tax Benefits and Eligibility

NSC is a small savings scheme offered by the Indian Post office. The certificates earn fixed interest, which is currently at 6.8% per anum. You can get a tax deduction on your investment. However, returns earned are taxable at maturity. This article will help you understand the various aspects that you need to consider when investing in NSC.

What is NSC?

NSC is a scheme which encourages small to mid-income investors to invest in savings scheme which will also help them in availing tax benefits and having a risk-free return on investment. This scheme is popular amongst government employees and other salaried taxpayers. However, it does not earn inflation-beating returns like Tax saving Mutual funds.

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What are the Features of NSC?

  • Rate of Interest: The Interest rate offered is 6.8%
  • Minimum and Maximum Investment: There is no maximum limit for investment. The minimum investment amount is INR. 1000/-. Effective from 1.4.2016, NSC can be issued for any amount above INR 100 in one transaction, provided the certificate is issued for an amount rounded off to the nearest 100.
    • One transaction of one (set of) investor(s) should result in only one certificate in e-mode or one entry in the passbook on one day.
    • So the issue of the certificate need not be dependent on the availability of a pre-printed certificate of the appropriate denomination.
    • Earlier, it could only be issued in denominations of INR 100, INR 500, INR 1000, INR 5000 and INR 10000
  • TDS Applicability: There will not be any tax deduction at the source.
  • Loan Against NSC: The savings certificates obtained can be kept as collateral security to get a loan from banks
  • Rate of Return: It guarantees the same rate of return for the entire investment term
  • Types: The NSC VIII issue has a fixed maturity period of 5 years. The NSC IX issued with a fixed maturity period of 10 years had been discontinued w.e.f. 20.12.2015. Transfer of certificates from one person to another can be done only once from the date of issue to the date of maturity
  • Physical and E-Certificate: Effective from 1st April 2016, the National Savings certificate will only be available in electronic mode(e-mode). The existing physical certificates owned by you are to be discontinued

Who is Eligible to Invest in NSC? 

The government launched NSC as a saving scheme for residential individuals. National Savings Certificate aims to offer capital protection, even though the rate of interest is less than tax saving mutual funds or Public Provident Fund, the return is in this scheme is a guarantee.

  • Indian residents can invest
  • Trust and HUF cannot invest
  • NRI’s can also not invest

What are the Tax Benefits of NSC?

Deposits up to INR 1,50,000/- per annum qualifies for IT deduction under section 80C of the Income Tax Act. The interest earned is taxable. But each year the interest considered is reinvested in the NSC. This means that every year you show the interest amount as income and then reinvest that income. Since it is deemed reinvested, it qualifies for a fresh deduction under Sec 80C, thereby making it tax-free. When the certificates mature it does not receive any tax deduction since the amount is not reinvested. The investor will have to pay tax on the final interest.

What are the Documents Required to Purchase NSC?

You must be KYC compliant to purchase National Savings Certificate.

  • NSC Purchase Form
  • Identity Proof such as PAN Card, Aadhar Card, Senior Citizen ID, Voter ID
  • Address Proof in the form of ELectricity Bill, Passport, Telephone Bill
  • Bank Statement along with a cheque
  • Passport Size Photographs

What is the Premature Withdrawal Procedure of NSC?

Even though NSC has a lock in period of 5 years, premature withdrawals are allowed in the following scenarios:

  • In case of death of the holder or holders (in case of the joint holder)
  • If any court of law orders the withdrawal of the certificate
  • If any Gazetted Government Officer forfeits the certificate

It is important to note that, if the certificates are withdrawn before completion of 1 year, you will not receive the interest amount only the principal amount. If the certificates are withdrawn after the completion of 1 year than the entire contribution as well as interest will be received.

Following documents are necessary for the withdrawal process:

  • NSC Original Certificate
  • NSC Encashment Form
  • Proof of identity
  • Signature of the nominee on the certificate is required
  • In case of a minor, attestation by a guardian is compulsory
  • If there are no nominees, the legal heir can opt for encashment upon submission of form SB84
  • In case of the demise of the account holder, the nominee can encash the certificate by submitting the following forms:
    • Annexure 1: Claim settlement application (registered at a post office)
    • Annexure 2: Claim settlement application (legal evidence)

Comparison with other Tax Saving Schemes

Investment Interest Lock-in Period Risk Profile
NPS 8% to 10% (expected) Till retirement Market-related risks
ELSS 12% to 15% (expected) 3 years Market-related risks
PPF 7.9% (guaranteed) 15 years Risk-free
FD 7% to 9% (guaranteed) 5 years Risk-free
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FAQs

Is the maturity value of NSC taxable?

Interest earned on the maturity of is taxable. During the investment tenure, annual accrued interest is not paid to the investor but instead, it is deemed reinvested. Since it is reinvested, it qualifies for deduction under section 80C thereby making it tax-free. However, when the NSC matures, the interest of the sixth year is not reinvested but paid out to the investor. So this interest amount upon maturity is not taxfree.

Is NSC one time investment?

NSC is a one-time investment. You can invest a minimum of Rs. 100 and there is not an upper limit for investment. Once you invest , then you will receive the maturity amount after 5 years of the lock-in period.

Can HUF invest in NSC?

No. HUFs and Trusts can not invest in NSC. The scheme is specially designed for Government employees, businessmen and other salaried classes.

Is there a lock in period in NSC?

Yes, the lock-in period is equal to the maturity period of the certificates i.e. 5 years. One can redeem it early but only under specific conditions.

Am I allowed to take a loan on the basis of NSC?

Yes, one can take a loan by keeping their certificates as collatral.

Can the nomination be changed in NSC?

Yes, nomination can be canceled or changed at any time by filling Form 3 and paying a nominal fee of INR 5.