Tax Deducted at Source (TDS) can significantly reduce the returns on Fixed Deposits (FDs) for senior citizens. However, with Form 15H, they can ensure that no TDS is deducted from their interest earnings, provided their total income remains within the exemption limit. This blog explains how senior citizens can use Form 15H to save TDS on FD interest up to ₹12 lakh.
What is Form 15H?
Form 15H is a self-declaration form submitted by senior citizens (aged 60 and above) to banks and financial institutions to prevent TDS deduction on interest income. It is applicable if their total taxable income is below the threshold that requires tax payment.
Eligibility Criteria for Form 15H
To avail of the TDS exemption, a senior citizen must meet the following conditions:
- (H3) Age: Must be 60 years or older.
- (H3) Taxable Income: The total taxable income should be below the exemption limit.
- (H3) Interest Income: TDS is deducted on interest if it exceeds ₹50,000 per year. Form 15H ensures no TDS deduction if the total income does not cross the basic exemption limit.
How Form 15H Helps Save TDS on FD Interest?
- Banks deduct TDS at 10% on interest exceeding ₹50,000 annually.
- If total income (including FD interest) is below the taxable limit, submitting Form 15H ensures that TDS is not deducted.
- With the new tax regime, a senior citizen’s income up to ₹12 lakh can be tax-free with deductions and exemptions
Steps to Fill and Submit Form 15H
Download Form 15H from the bank’s website or collect it from the branch.
Fill in details like name, PAN, age, address, and estimated income.
Submit to the bank where the FD is held.
Ensure timely submission at the beginning of the financial year to prevent TDS deductions.
When to Submit Form 15H?
- At the start of every financial year.
- Before the first interest payout of the year.
- It must be submitted separately for each bank where FDs are held.
1. Can I submit Form 15H online?
Yes, many banks allow online submission through net banking or mobile banking apps.
2. What happens if I forget to submit Form 15H?
The bank will deduct TDS, and you can claim a refund when filing your income tax return.
3. Is Form 15H applicable for joint FDs?
No, Form 15H applies only if the primary account holder is a senior citizen.
4. What if my income exceeds the taxable limit later?
If income exceeds the tax exemption limit, TDS should be deducted, and the individual must pay the necessary taxes.
5. Can I use Form 15H for other types of interest income?
Yes, it can be used for income from deposits like RD (Recurring Deposits) and other interest-bearing instruments, subject to eligibility.
By understanding and utilizing Form 15H, senior citizens can maximize their interest earnings without unnecessary TDS deductions. Ensure you submit it timely to enjoy a hassle-free financial year.