If you earn interest more than ₹40,000 but your total income is not taxable, you need not worry about submitting Forms 15G and 15H to the banks. However, the condition is that these forms must have been submitted for the financial year 2019-20.
"To mitigate the hardships of small taxpayers, it has been decided that if a person had submitted valid Forms 15G and 15H to the banks or other institutions for FY 2019-20, then these forms would be valid up to June 30," Income Tax Departement said on Saturday. This will safeguard the small tax payers against TDS (Tax Deducted at Source) where there is no tax liability.
Form 15G and Form 15H are forms that one can submit to prevent TDS deduction on interest income. Banks have to deduct TDS when one's interest income is more than ₹40,000 in a year (prior to FY 2019-20, the limit was ₹10,000). The bank adds deposits held in all its branches to calculate this limit. But if one' total income is below the taxable limit, he can submit these forms to the bank requesting them not to deduct any TDS. Form 15H is for senior citizens, those who are 60 years or older; while Form 15G is for others.
For submitting these forms, PAN is compulsory. Many banks allow their customers to submit these forms online through their website. Form 15G and Form 15H are valid for one financial year and need to be submitted these forms every year at the beginning of the financial year. This will ensure the bank does not deduct any TDS on interest income provided total income is not taxable.