Eligibility of 15H 15G

Is the interest earned from savings account taxable?

-Ramesh Talwar
No, the interest earned on savings account is exempted from
TDS under Section 194 A of Income Tax Act. However, interest
income from fixed deposit is liable for TDS if the interest income
is more than Rs 10,000 in a year. In your case, since the interest
earned on fixed deposits is Rs 20,000 every year, the bank will
deduct TDS unless you have submitted form 15G or 15H. As per
IT rules, if the fixed deposit holder is a resident individual, for an
interest payment of up to Rs 10 lakh, TDS will be deducted at the
rate of 10% along with an education cess of 3% (3% on 10),
which takes the total deduction to 10.3%.

NOW, HOW TO SAVE TDS ON FIXED DEPOSITS

There are multiple ways to achieve this. Here are four easy ways you can
follow to save TDS on FDs:
1. By submitting Form 15G/15H
If an investor submits Form 15G stating that he has no taxable income,
the bank would not deduct any TDS on the interest earned. For senior
citizens, the requisite form to avoid TDS is 15H.
2. Distributing FD investment
Another way to avoid TDS is by splitting the deposit into separate banks
in such a way that interest earned from any of the FDs does not exceed
the Rs 10,000 limit.
3. Timing the FD
You can also save TDS by timing your FD in such a way that interest for
any of the financial years does not exceed Rs 10,000.
For example, a 12-month fixed deposit of Rs 1 lakh at 10.5 per cent could
be started in September as financial year closes on 31st March. This way,
the interest would split in two financial years, and hence TDS will be
avoided.
4. Splitting the FD

An individual can start one fixed deposit under his/her personal bank
account and another one under an HUF account, and, so, both will be
treated as separate. So an investor with an HUF identity can split the
corpus under such two heads.
Fixed deposit is an all-time favorite financial investment instrument. It
provides a handsome return as well as liquidity at the time of need to an
investor. Looking at the volatility, high associated risk and less assured
return by other financial instruments currently, the attractiveness of fixed
deposits is set to grow in the future.
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and completeness of the same.
First and foremost only a person who is resident in India can submit form No. 15G. So an NRI
cannot submit this form. Any person other than a Company can submit form No. 15 G. So any
Individual and HUF can submit form No. 15G. However it is not that every Individual or HUF can
submit form No. 15G.
Only the individual or HUF, whose tax on the estimated income for the year is nil and the amount
of interest income from all the sources does not exceed the minimum exemption limit, can submit
this form. So for being eligible for you to submit this form, you need to satisfy both the above
conditions. In a situation where due to various deductions the tax payable on total income may be
nil but if the total amount of interest income is expected to exceed Rs. 2 lacs you cannot submit
this form.
Who can submit form No. 15H? Any resident Individual who is above sixty years of age or
completes sixty years during the financial year can submit form No. 15H provided his tax liability
on the basis of his estimated income is nil for the financial year though the total amount of interest
from all sources may exceed Rs. 2.50 lacs, the minimum amount liable for tax.
So only senior citizens can submit this form. What precautions to be taken while submitting form
no. 15G and 15H? Please ensure to submit your PAN details to the bank while submitting the form
No. 15G or 15 H. In case you fail to provide your PAN number to the bank, the bank will deduct
TDS @ 20 percent against the applicable rate of 10 percent even if you have submitted form no.
15G and 15H. I would advise you to submit a copy of your PAN card by way of separate letter and
obtain written acknowledgement for the same. Please obtain acknowledgement for form no. 15 G
or 15H while submitting it. So it is advisable to get the form submitted personally rather than
sending it through post so as to ensure proper acknowledgement What if the bank has already
deducted tax before submission of the form? The form no. 15G or 15H as the case may be, should

be submitted at the beginning of the year so as to avoid a situation where bank has already
deducted the tax before you submit the form. However in case the bank deducts the tax in spite of
you having submitted the form or before you actually submit the same, the bank will not refund the
tax already deducted, as the bank would have already deposited the tax with the government. In
such a situation the only option available with you is to file your income tax return and claim the
amount of TDS a refund. I hope that from the above discussion it becomes clear that you need to
comply certain conditions to be eligible for filing form No. 15G or 15H. Moreover you need to take
certain

precautions

while

filing

these

forms

with

the

bank.

Individual resident aged below 60 years (i.e. born on or after 1st April 1955) or any NRI/ HUF/ AOP/
BOI/ AJP*
Income Tax :Tax Calculator : AY 2015-16
Income Slabs

Tax Rates

i.

Where the taxable income does not exceed Rs.

2,50,000/-.

NIL

ii.

Where the taxable income exceeds Rs. 2,50,000/- but

does not exceed Rs. 5,00,000/-.

10% of amount by which the taxable income exceeds Rs.

2,50,000/-.
Less ( in case of Resident Individuals only ) : Tax Credit u/s 87A - 10% of
taxable income upto a maximum of Rs. 2000/-.

iii
.

Where the taxable income exceeds Rs. 5,00,000/- but

does not exceed Rs. 10,00,000/-.

Rs. 25,000/- + 20% of the amount by which the taxable income

exceeds Rs. 5,00,000/-.

iv.

Where the taxable income exceeds Rs. 10,00,000/-.

Rs. 125,000/- + 30% of the amount by which the taxable income

exceeds Rs. 10,00,000/-.

Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in
Surcharge, if applicable)
Education Cess : 3% of the total of Income Tax and Surcharge.
* Abbreviations

used

NRI - Non Resident Individual; HUF - Hindu Undivided Family; AOP - Association of Persons; BOI - Body of Individuals; AJP
- Artificial Judicial Person

I.

Senior Citizen (Individual resident who is of the age of 60 years or more but below the age of 80 years
at any time during the previous year i.e. born on or after 1st April 1935 but before 1st April 1955)

Income Tax :Tax Calculator : AY 2015-16

Income Slabs

Tax Rates

i.

Where the taxable income does not exceed Rs. 3,00,000/-.

NIL

ii.

Where the taxable income exceeds Rs. 3,00,000/- but does

not exceed Rs. 5,00,000/-

10% of the amount by which the taxable income exceeds Rs.

3,00,000/-.
Less : Tax Credit u/s 87A - 10% of taxable income upto a
maximum of Rs. 2000/-.

iii
.

Where the taxable income exceeds Rs. 5,00,000/- but does

not exceed Rs. 10,00,000/-

Rs. 20,000/- + 20% of the amount by which the taxable

income exceeds Rs. 5,00,000/-.

iv.

Where the taxable income exceeds Rs. 10,00,000/-

Rs. 120,000/- + 30% of the amount by which the taxable

income exceeds Rs. 10,00,000/-.

Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in
Surcharge, if applicable)

Education

II.

Cess

: 3%

of

the

total

of

Income

Tax

and

Surcharge.

Super Senior Citizen (Individual resident who is of the age of 80 years or more at any time during the
previous year i.e. born before 1st April 1935)

Income Tax :Tax Calculator : AY 2015-16

Income Slabs

Tax Rates

i.

Where the taxable income does not exceed Rs. 5,00,000/-.

NIL

ii.

Where the taxable income exceeds Rs. 5,00,000/- but does

not exceed Rs. 10,00,000/-

20% of the amount by which the taxable income exceeds Rs.

5,00,000/-.

iii
.

Where the taxable income exceeds Rs. 10,00,000/-

Rs. 100,000/- + 30% of the amount by which the taxable

income exceeds Rs. 10,00,000/-.

Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in
Surcharge, if applicable)
Education Cess : 3% of the total of Income Tax and Surcharge.

Eligibility:
The basic conditions for filing 15G are--the final tax on estimated total
income computed as per the Income Tax Act should be nil; and, the aggregate
of the interest (excluding interest earned on securities) received during the
financial year should not exceed the basic exemption slab of `2.5 lakh. If
these criteria are met, you can submit Form 15G and the entire interest
income would be credited without any tax cut.
You need to meet both criteria. Even if the interest income is less than the
basic exemption allowed during that financial year, but your total tax liability
is not nil, you will not be eligible for filing Form 15G. The reverse is also true.
Say your income is `4 lakh, of which `3 lakh is earned as interest from the
bank. You might invest `1.5 lakh in PPF and be out of the tax net, but you are
not eligible for Form 15G as though your tax liability is zero, the interest
income is high er than the basic exemption of `2 lakh. The refund route is
your only recourse.
Form 15H can be only filed by individuals above 60. This form imposes only
the first condition--the final tax on the investor's estimated total income
should be nil. So, if you are above 60, your taxable income for the financial
year can be up to `3 lakh for you to be eligible for 15H. For super senior
citizens above 80 years, this limit is `5 lakh.