How the tax form 15G and Form 15H can save TDS on fixed deposits?


No one likes to give away their hard earned money as taxes. If the tax is deducted at source it
is downright painful. There is the provision to furnish Form 15G and Form 15 H to avoid the
deduction of taxes on interest income. Tax saving FD is the best way to create an investment
profile that mitigates tax too. As fixed deposit rates are higher than savings accounts, they
can be useful in enhancing interest income.
Form 15H and Form 15G are self-declaration documents that you need to file with the financial
institution or bank. The TDS that accrues on the interest of the fixed deposit can be averted if
you provide the appropriate documents to your banker. The interest on any fixed deposit is
calculated at the end of the tenure. But it is not so, the frequency is as you have specified and
the interest accrues cumulatively. It is reflected on the Form 26AS. This is when the interest
becomes applicable for TDS. 
Why do you need a Form 15H or a Form 15G?
Term deposits or fixed deposits give you income in the form of interest. The periodic interest that is
credited to your account is liable to taxation. Savings accounts are not taxed at source but fixed deposits
are. The taxation rules on interest income are as mentioned below:
  • The section 80TTA allows any interest earned by you in a financial year on a savings account up to
  • Rs 10,000 to be considered as deduction.
  • If you are a senior citizen, that is, over sixty years old, you can claim a deduction of Rs 50,000 u/s
  • 80TTB on interest accumulated on savings accounts and Fixed Deposit (FD)
The Form 15G can be submitted by people under sixty if you have a clubbed interest income of under the
basic exemption limit of Rs 2.5 lakhs to avoid TDS. No TDS is deducted for only savings bank interest.
You can submit Form 15 G or Form 15H for various transactions. 
  • Interest income proof for financial institutions and banks to avoid deduction of TDS.
  • Form 15 G and 15 H can be used to withdraw any amount higher than Rs 50,000 as a premature
  • withdrawal from EPF. If your withdrawal is less than five years from the date of opening the account
  • you will have to comply by furnishing the form.
  • If you earn rental income of over Rs 1,80,000 in a financial year you will need to provide the Form
  • 15G or 15H as required
  • If your earning as an insurance agent advisor is over Rs 15,000 you are eligible for TDS deduction.
  • But you can avoid the same by furnishing your 15G or H forms.
Form 15h and 15g can be filed even if your total income exceeds the total except level of Rs 5 lakhs.
If your total income that attracts zero tax and is inclusive of deductions and allowances is within the
exempt limit, you can provide these forms for the purpose of tax relief. The senior citizens especially
benefit from this provision in the tax laws.
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