In India, Form 15G allows for an individual to prevent Tax Deducted at Source (TDS) to be deducted from their interest earned on income. If Form 15G is not submitted, banks and financial institutions will deduct TDS on any interest that is earned from income which exceeds Rs. 10,000 in a year. If your income, however, is below the taxable limit; you can submit the Form 15G and request the banks to not deduct TDS. A completed Form 15G must be submitted to all banks and branches from where the individual is earning an interest income.
Amit had started a fixed deposit account a couple of years earlier, upon his mother’s insistence, at the branch of a nationalised bank near his house. When the financial year was ending, his mother kept insisting that he fill out Form 15G but he assumed that since his income was below the taxable limit, the banks would not deduct TDS from his income. However, he was wrong.
It is essential to file Form 15G regardless of your income limit. It can come in useful several other places as well. For instance, if you want to avail small business loans or any other kind of loan, you might need to share the Form 15G you have previously filed. Loans have become much easier to avail, especially if you choose to apply for them on Finserv MARKETS, where you can have the loan amount credited to your account within 24 hours.
If you have newly learnt that you need to mandatorily file, and are unsure of how to fill Form 15G, read on below.
Under the Income Tax Act of 1961, sub-section (1) and (1A) of Section 197A refers to Form 15G as a claim declaration by an individual of receipts without deduction of tax. There is an eligibility criterion specified for those submitting Form 15G. It includes:
- Only individuals under the age of 60 years and a Hindu Undivided Family (HUF) can submit Form 15G
- The form must be mandatorily submitted before the first payment of interest by the bank or financial institution
- The form must be submitted to every branch from where the individual is collecting interest. This can now be submitted online for many banks, where digitalisation has increased transparency and convenience for consumers. This increased transparency can also be seen when you apply for small business loans and personal loans online, on Finserv MARKETS, where loans up to Rs. 25 lakh can be approved in under 3 minutes.
- Form15G can only be submitted by individuals whose tax payable on total income is zero
- Form 15G may only be submitted by resident Indians
- Form 15G may only be submitted by individuals whose total interest income is below the minimum exemption amount for that year, as indicated by the state
Since Form 15G is submitted for a range of purposes, it is important to know how to fill Form 15G. Read on to learn about all the different purposes a Form 15G can be submitted for.
TDS on Insurance Commission:
If the total income earned on insurance commission exceeds Rs. 15,000 for each financial year, the insurance agent is liable to TDS deductions on the income. In case the tax payable by an insurance agent on his total income is zero, he can submit the Form 15G to claim exemption.
TDS on Rent:
TDS deduction is liable on rent being paid, above a certain limit specified each year by the government. However, if the landlord’s tax payable on total income is zero, he can request his tenant to not deduct TDS after submitting a Form 15G.
TDS on Income Generated by Post Office Deposits:
The income generated by an individual from their post office deposits can be liable to TDS deductions if it is above a certain limit. However, by submitting the Form 15G, depositors can claim exemption from TDS provided they meet other eligibility criteria. Submitting the Form 15G allows a depositor to claim their total interest income more easily. Digitisation of these banking functions has made processes a lot easier for customers.
TDS on Income Generated from Corporate Bonds:
Form 15G should be submitted on the income generated from corporate bonds as well since the limit there is Rs. 5,000.
TDS on EPF Withdrawal:
Withdrawal of your PF amount can be subjected to TDS unless Form 15G has been submitted. The TDS deduction is only done if the person chooses to withdraw their funds before 5 years of holding the EPF account have passed.
Form 15G is essentially a document that allows you to retain your income in full, with maximum convenience. Since the form has to be submitted across all the banks where you have accounts from where you receive income, it might be best to figure out how to fill Form 15G and complete the process online. When you submit Form 15G, it also becomes much easier to apply for small business loans and the best personal loans. If you apply through Finserv MARKETS, you can get access to loans of up to Rs. 25 lakh in less than 24 hours after submitting minimal documentation. Also know how you can avail tax benefit on personal loan under some conditions.
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