Many taxpayers notice that banks deduct TDS on Fixed Deposit (FD) interest even when their total taxable income is below the income tax limit. To help eligible taxpayers avoid unnecessary TDS deduction, the Income Tax Act allows submission of Form 15G and Form 15H.
These forms are self-declarations submitted to banks and certain financial institutions stating that the taxpayer’s tax liability for the financial year is expected to be nil.
For FY 2026-27, understanding the correct use of Form 15G and Form 15H is important for:
This guide explains eligibility, limits, rules, mistakes, and the process for avoiding TDS on FD interest.
Banks deduct Tax Deducted at Source (TDS) on interest earned from:
TDS is generally deducted when interest crosses prescribed thresholds during the financial year.
These are self-declaration forms submitted to banks requesting them not to deduct TDS because the taxpayer expects nil tax liability.
| Form | Applicable To |
|---|---|
| Form 15G | Individuals below 60 years & certain entities |
| Form 15H | Senior citizens (60 years or above) |
| Particulars | Form 15G | Form 15H |
|---|---|---|
| Age | Below 60 years | 60 years or above |
| Hindu Undivided Family (HUF) Eligible | Yes | No |
| Resident Individual | Yes | Yes |
| Tax Liability Condition | Nil tax liability | Nil tax liability |
| Income Limit Restriction | Yes | More relaxed compared to 15G |
A person can submit Form 15G if:
The tax on total estimated income for the year should be zero.
Form 15H can be submitted by:
Senior citizens get more flexibility because submission is allowed even if interest income exceeds basic exemption limit, provided overall tax liability remains nil after deductions/rebate.
Banks do not automatically know your final tax liability.
If interest crosses threshold limits:
Threshold limits may change through Budget notifications, but banks generally deduct TDS once aggregate interest crosses specified limits.
Senior citizens usually get higher threshold benefits compared to non-senior citizens.
Taxpayers should verify latest limits applicable for FY 2026-27.
Best practice:
Ideally:
This helps avoid:
Forms can usually be submitted to:
Most banks now allow:
Generally required details include:
PAN is mandatory in most cases.
If PAN is not updated:
Therefore:
✔ Ensure PAN is linked and updated with bank records.
If actual tax liability exists:
❌ Wrong submission may attract consequences.
Taxpayers often calculate only one bank FD.
But total interest from:
should be considered.
Even if TDS is not deducted:
Many taxpayers wrongly assume no TDS means no reporting.
Forms usually need fresh submission each financial year.
Incorrect declaration may create future scrutiny risk.
These forms only help avoid:
They do NOT automatically make income exempt.
If total taxable income exceeds applicable tax limits:
✔ Tax must still be paid through ITR.
Senior citizens often get:
This makes proper tax planning very important for retirees.
If bank already deducted TDS:
OR
Taxpayers can verify TDS through:
Even when:
Interest income must still be disclosed in Income Tax Return.
Failure may create:
Taxpayers may also claim deductions:
| Section | Applicable To |
|---|---|
| 80TTA | Savings interest for non-senior citizens |
| 80TTB | Interest deduction for senior citizens |
These deductions help reduce taxable income.
These forms may also be accepted by:
subject to compliance rules.
A retired senior citizen earns:
After deductions and rebate, final tax liability becomes NIL.
✔ Form 15H may help avoid TDS deduction.
A student earns:
If final taxable income remains below taxable limit:
✔ Form 15G may be submitted.
Submitting false declaration intentionally may attract:
Therefore, forms should be filed carefully.
TAXAJ helps taxpayers with:
Proper planning helps avoid unnecessary TDS blockage and refund delays.
Form 15G and Form 15H are useful tools for eligible taxpayers to avoid unnecessary TDS deduction on FD interest during FY 2026-27. However, these forms should be submitted carefully after estimating total income and tax liability correctly.
Taxpayers must remember that:
Proper tax planning and timely submission can help improve cash flow and avoid refund delays.
For professional assistance with Form 15G, Form 15H, TDS, and income tax filing, TAXAJ provides complete tax compliance and advisory support.