What Is The Difference Between Form 15G and 15H? Which one to Use?

Form 15G and 15H are both self declaration form which needs to be submitted to the bank after opening a fixed deposit.

You need to submit the same only when you are confident that your income during any financial year would not exceed the taxable income limit.

For example, one needs to currently pay income tax on amount of income exceeding Rs 2.5 lakhs In such cases there will be no deduction of tax at source.

One should always submit the form at the beginning of each Financial year. The form needs to be submitted at the respective branch.

As of now, if your bank interest exceeds the Rs 10,000 interest income limit, then TDS will be deducted.

If your income is not above the threshold limit for tax payment, then it's best to submit form 15G/H as the case maybe. This would ensure that there is no TDS cut.

These forms can also be used for payments such as interest on securities, interest other than interest on securities, dividends.

These forms have to be filed in duplicate and once the bank or the post office takes them on record, the entire interest is paid to the investor without any tax deduction.

The bank will retain one copy and the second one would be sent to the Income Tax Department.

Income Tax Criteria.

• The final tax on his estimated total income computed as per the provisions of the Income Tax Act should be nil.
• The aggregate of the interest etc. received during the financial year should not exceed the basic exemption slab.

Form 15G

Form 15G can be submitted by any citizen who has not crossed the age of 60, if he satisfy the income tax criteria.

The declaration has to be given in prescribed format only wherein the valid 10 digit PAN is also required.

Let us consider an example

	Aakash Below age 60	Arjun below age 60
Interest Income	1,50,000	2,50,000
Other Income	1,00,000	1,00,000
Deductions	50000	50000
Form 15G	Applicable	Not Valid

Note: It's only right that you do not submit the form 15G if your income is liable for taxes. There is no way the bank is able to know whether you have exceeded the tax limit and hence you are ineligible for TDS waiver.

Since you have submitted the 15G form they would not deduct TDS. 

Form 15H

Form 15H can be submitted by senior citizen who has crossed the age of 60, if he satisfy the income tax criteria as mentioned. The maximum limit permitted for the senior Citizen for the Financial year 2015-16 is Rs 3,00,000.

For Senior Citizen who have attained and crossed the age 80 years, maximum limit is Rs 5,00,000.

The total income and interest earned from the bank for the year should not exceed the basic exemption limit set in that particular year. Total income is considered before any deductions.

In case of Senior Citizens, if the interest payable by the Bank during the financial year on fixed deposits exceeds the maximum limit, then Form 15H should not be submitted.