Tax deducted at source (TDS) often reduces cash flow for individuals earning interest income from fixed deposits and other investments. Many taxpayers are unaware that if their total income is below the taxable limit, they can legally prevent TDS deduction by submitting the correct declaration forms. Understanding the proper use of Form 15G and Form 15H is essential to avoid unnecessary tax deduction and compliance issues.
In 2026, tax reporting systems are more automated, and incorrect declarations are easier to detect. Wrong submission of these forms can result in penalties, notices, and additional scrutiny. A clear understanding of eligibility, usage rules, and common mistakes ensures proper compliance and better financial planning.
Here is a simple guide explaining when to use these forms and how to avoid errors.
What Are Form 15G and Form 15H
Form 15G and Form 15H are self-declaration forms submitted to banks or financial institutions to prevent TDS deduction on interest income when tax liability is zero.
Purpose of these forms:
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Prevent unnecessary tax deduction
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Improve cash flow
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Declare income below taxable limit
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Avoid refund claims later
They do not eliminate tax liability if income is taxable.
Difference Between Form 15G and Form 15H
Although both forms serve similar purposes, eligibility differs.
| Feature | Form 15G | Form 15H |
|---|---|---|
| Age requirement | Below 60 years | 60 years or above |
| Who can submit | Individuals and HUFs | Senior citizens |
| Tax liability condition | Must be zero | Must be zero |
| Income limit condition | Total income below taxable limit | No strict income limit if tax is nil |
Choosing the correct form is essential.
Who Can Submit Form 15G
Form 15G is meant for individuals below 60 years who meet specific conditions.
Eligibility requirements include:
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Resident individual or Hindu Undivided Family
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Age below 60 years
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Total taxable income below basic exemption limit
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Tax liability should be zero
If tax liability exists, the form should not be submitted.
Who Can Submit Form 15H
Form 15H is designed for senior citizens.
Eligibility conditions include:
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Age 60 years or above
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Resident individual
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Tax liability should be zero after deductions
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Can be submitted even if interest income exceeds threshold
This provides flexibility for retirees.
Where These Forms Can Be Submitted
Forms can be submitted to multiple institutions where interest income is earned.
Common places include:
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Banks for fixed deposits
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Post office deposits
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Corporate bond issuers
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Financial institutions paying interest
Submission must be made separately for each institution.
When Should Form 15G or 15H Be Submitted
Timing plays an important role in preventing TDS.
Recommended timing:
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At the beginning of the financial year
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Before interest payment date
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Immediately after opening deposit
Late submission may not reverse deducted TDS.
How TDS Works Without Form 15G or 15H
If eligible individuals fail to submit forms, TDS may be deducted even when tax liability is zero.
Consequences include:
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Reduced interest payout
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Need to claim refund through ITR
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Delayed cash flow
Submitting forms avoids unnecessary deduction.
Common Mistakes While Submitting Form 15G/15H
Incorrect submission can create compliance issues.
Frequent mistakes include:
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Submitting form despite taxable income
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Ignoring total income calculation
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Providing incorrect PAN details
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Submitting form to only one bank
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Assuming submission once is permanent
Accuracy is essential for compliance.
Penalty for Wrong Declaration
Submitting false declarations can attract legal consequences.
Possible outcomes include:
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Financial penalty
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Tax notice from authorities
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Interest on unpaid tax
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Legal proceedings in serious cases
Declarations must be truthful.
How to Calculate Eligibility Correctly
Before submitting the form, taxpayers should estimate total income carefully.
Include:
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Salary or pension income
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Interest from all deposits
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Rental income
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Other taxable income
After deductions, tax liability must be zero to qualify.
Form 15G/15H and Fixed Deposit Interest
These forms are commonly used to avoid TDS on fixed deposit interest.
Important points:
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Apply separately for each bank
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Must be submitted annually
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Applies only if eligibility conditions are met
They help maintain full interest payout.
How to Submit Form 15G or 15H
Most institutions provide both offline and online submission options.
Submission methods include:
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Internet banking portal
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Bank branch submission
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Online financial institution forms
Digital submission simplifies compliance.
Benefits of Correct Form Submission
Proper usage provides multiple advantages.
Key benefits:
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No unnecessary TDS deduction
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Better cash flow
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Reduced refund claims
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Smooth tax compliance
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Better financial planning
Correct declaration improves efficiency.
Why These Forms Matter More in 2026
Improved data matching and reporting systems have increased compliance monitoring.
Implications include:
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Automatic income tracking
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Faster verification
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Reduced scope for incorrect claims
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Higher scrutiny of declarations
Accurate filing prevents future issues.
Conclusion
Form 15G and Form 15H help eligible taxpayers avoid unnecessary TDS deductions, but they must be used carefully. Understanding eligibility rules, calculating income correctly, and submitting accurate information ensures smooth tax compliance.
A proper understanding of Form 15G and Form 15H usage helps individuals maintain cash flow, avoid penalties, and manage interest income efficiently. Responsible declaration remains the safest approach to tax compliance.
FAQs
Who can submit Form 15G?
Resident individuals below 60 years with zero tax liability can submit Form 15G.
Who should submit Form 15H?
Senior citizens aged 60 years or above with no tax liability can submit Form 15H.
Can Form 15G or 15H eliminate tax liability?
No, these forms only prevent TDS deduction. Tax must still be paid if applicable.
Is Form 15G/15H required every year?
Yes, the declaration must be submitted each financial year.
What happens if wrong information is provided?
Incorrect declarations may result in penalties or tax notices.