Form 15G and How to Save on Interest Income

Posted in Income Tax Blogs By Finserv MARKETS - Nov 28,2019
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Banks in India are mandated to cut the tax deducted at source (TDS) if your income from interest exceeds Rs. 10,000 a year. However, the Form 15G can be submitted to banks, requesting them not to deduct TDS if your total income falls below the exemption limit.

Form 15G is valid for one financial year, and thus, must be submitted without fail every year if you wish to not have TDS deducted from your interest income. Filing Form 15G is also useful in a lot of cases where you must provide documentation, such as if you are applying for a personal loan or a home loan. A personal loan can be used for a range of activities, including taking your family on a long-anticipated luxurious holiday or even to throw a grand wedding. Apply for a personal loan on Bajaj Markets today and get access to up to Rs. 25 lakh which can be repaid over a flexible tenure ranging from 12 to 60 months.

For your Form 15G to be eligible for submission, you must fulfill a few conditions. These include:-

  • You must be a resident Indian individual or HUF or trust, but it cannot be submitted by a company
  • Your age should be less than 60 years. If you are 60 years or older, you can submit the Form 15H which helps save your interest income from TDS deductions
  • The tax calculated on your total income must be nil
  • The total interest income you earn for that year must be less than the basic exemption limit for that financial year

Several banks in India have digitised their processes and now allow patrons to submit the Form 15G online. Digitalisation of banking processes are proving beneficial for a lot of objectives, including while applying for a personal loan or home loan. On Bajaj Markets, you can even have your personal loan application approved in as little as 3 minutes. You can avail up to Rs. 25 lakh within 24 hours, and pay only the interest as EMIs for the initial period of your loan. The entire loan application process is hassle-free and offers you utmost convenience. You will only be required to supply minimal documentation and zero collateral. You can avail loans with the simple click of a button now!

Submitting the Form 15G helps you save TDs on your interest income, but it also has other uses. Read on to learn about the other instances where submitting the Form 15G can aid your savings.

1. On Income from Corporate Bonds:

Corporate bonds are a great investment instrument, and are popular with many people for a host of reasons. However, if you own corporate bonds, you are liable to have TDS deducted if your income from them exceeds Rs. 5,000. Submitting the Form 15G to the issuer of these bonds can help you save your income from TDS deductions.

2. On EPF Withdrawal:

The Employee Provident Fund (EPF) has a lock-in period of 5 years, but if you withdraw funds from it before the 5 years are over, TDS is deducted on the amount. However, if you have held the account for less than 5 years and still wish to withdraw funds, you can submit the Form 15G. For this to be accepted, you must fulfill the other associated conditions, namely, those mentioned above. Most importantly, the taxable amount on your total income, including the amount withdrawn from the EPF account, must be zero.

3. On Rent:

If you own property and earn rent from it, the income you earn is subject to TDS deductions. For TDS deductions to be applicable, the total annual income earned from rent must exceed Rs. 2.4 lakh. However, you can circumvent this by submitting the Form 15G and requesting the tenant to not deduct TDS. This is only valid if the tax burden on your total income is nil.

4. On Post Office Deposits:

TDS is deducted on the total interest income you earn from your post office deposits as well. However, if you meet the other conditions applicable to submitting the Form 15G, your income earned on post office deposits can also be exempted from TDS deductions.

5. On Insurance Commission:

The commission earned by insurance agents is also subjected to TDS deductions, if the total amount earned exceeds Rs. 15,000 in a financial year. By submitting Form 15G, agents can prevent TDS deductions. It is important to remember that this is only valid if the tax liable on your total income is nil.

Form 15G can help you save the total income you earn as interest, without any deductions in the form of TDS. While submitting Form 15G may feel like a tedious process owing to the documentation involved, it is good to know that nowadays, these functions days do not require such manual processes. For instance, you can easily avail personal loans or home loans with minimal documentation only on Bajaj Markets. Personal loans of up to Rs. 25 lakh can be availed with minimal documentation, and the loan application can be approved in under 3 minutes. The loan amount is credited to your account within 24 hours, and can be repaid over a flexible tenure ranging from 12 to 60 months.

Did you know there are tax benefits on personal loans? Get to know tax benefits of personal loans.

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