What Is Form 15G?
Have you or someone from your immediate family invested in a fixed deposit, provident funds, or similar financial investment schemes? If yes, Form 15G is something you should know of. Form 15G is to be filled out by fixed deposit holders (who can be individuals under the age of 60 years or Hindu Undivided Family) to ensure that no TDS (Tax Deduction at Source) is subtracted from the interest income in a year.
As per recent income tax regulations, it is mandatory for all banks and financial institutions to deduct tax at sources for any interest earned on financial instruments like fixed deposits (FD), recurring deposits, provident funds, or others.
In keeping with this rule, the Employees’ Provident Fund Organization (EPFO) united portal launched a facility to submit Employee Provident Fund (EPF) Form 15G for PF online. This enables EPF members to withdraw their PF online and avoid TDS deductions on their investments.
Key Features of Form 15G
- Form 15G is a self-declaration form that an individual or HUF can fill out to seek non-deduction of TDS on specific income if the annual income of the assessee is less than the exception limit.
- The rules for self-declaration forms are mentioned under the provisions of Section 194A of the Income Tax Act, 1961.
- The structure of Form 15G has undergone considerable change since 2015 to ease the compliance burden and make it easy for both tax deductors and tax filers.
- The Central Board of Direct Taxes introduced the current format of Form 15G and Form 15H.
- Form 15G can be submitted by individuals only who are under the age of 60 years. For any individual over the age of 60 years, they will have to fill out Form 15H.
- To avail of the benefits, the declaration Form 15G has to be submitted before the end of the first quarter o the financial year since TDS is deducted during each quarter. If the form is not submitted in time, the TDS will get deducted, and one needs to submit reimbursement under Income Tax filing to get this amount reimbursed by the Income Tax Department.
Eligibility Criteria for Submitting Form 15G
To fill out EPF Form 15G or Form 15G for PF withdrawal, you must meet the following eligibility criteria:
- Fill out the form as an individual (other than a company or firm that you are associated with).
- Be a resident of India for the applicable financial year.
- Should not be more than 60 years old.
- You must ensure your tax liability is calculated to be zero on the total taxable income for the financial year.
- Your total interest income for the financial year should be less than the amount exempted from TDS under Form 15G guidelines.
When Can Form 15G Be Submitted?
Form 15G can be submitted to save TDS on any interest income or investment withdrawal during that financial year and needs to be submitted ideally at the start of the financial year to ensure that the deduction doesn’t take place. Since banks and other financial institutions usually have a quarterly TDS payment, a delay in filing Form 15G can lead to the TDS getting cut.
The investor will then need to get reimbursed via the Income Tax Department. The Form 15G for PF withdrawal and EPFO 15G Form needs to be submitted in one of the following or all instances as applicable:
Form 15G for Interest on Income From Bank Deposits
If you have made any investments with banks, such as a recurring deposit, fixed deposit, or other financial instruments, the interest amount you will earn will be tax-free, up to INR 10,000 in a year. (This was revised to INR 40,000 annually as per the regulation announced in FY 2019-20)
Any amount that exceeds INR 40,000 will be taxed. However, the bank TDS deduction is not required, so the TDS deduction can be avoided by filling out and submitting Form 15G for Fixed Deposits or other bank deposits.
Form 15G For PF Withdrawal or EPFO 15G Form
For TDS on Employee’s Provident Fund withdrawal, the employee has to fill out Form 15G, ensuring this deduction does not happen. If the employee’s Provident Fund withdrawal is prior to completing at least 5 years of services at the current organization, the TDS is applicable on proceeds.
However, even in this case, if the total taxable income, including the PF withdrawal balance, is zero, then submitting Form 15G for PF ensures a non-deduction of TDS.
Form 15G for Post Office Deposits
Similar to bank Deposits, any investment made with the Post Office is liable for getting TDS benefit. You can submit Form 15G declaration for your post office deposits and national saving scheme (NSS) and ensure that the TDS is not deducted.
Form 15G for Corporate Bonds or Debentures
For Corporate Bonds and Debentures that exceed INR 5000 for a financial year, you will be subjected to TDS.
However, if the amount is less and you are eligible, you can submit Form 15G for Corporate Bonds or Debenture investment and request the issuer of the bonds not to deduct TDS.
Form 15G for Life Insurance Policy
If you have invested in a Life Insurance Policy which has matured and you plan on withdrawing or getting interest income from this scheme, then you can ensure that the TDS on this amount is not cut. Under the provision of Section 194DA of the Income Tax Act, 1961, income from a Life Insurance Policy is exempt from TDS.
However, if this amount exceeds INR 1 lakh, such proceeds are subjected to tax deduction at source. So if you satisfy the conditions mentioned in Form 15G for Life Insurance Policy proceeds, you can submit Form 15G and prevent TDS deductions on this amount.
Form 15G For Rental Income
If you have rental income in the financial year that does not exceed INR 8 lakh, then you can fill out Form 15G for non-deduction of TDS and ensure that the TDS deduction is not cut from your account.
However, if your income in the financial year from rental income is higher than INR 8 lakh, then there can be no benefits and is liable for Tax Deduction at the source.
How to Fill Out EPF Form 15G?
To get EPFO 15G Form, you need to visit the EPFO UAN portal and search ‘EPF Form 15G Download’. You will get an option similar to the one shown in this image.
Source - https://incometaxindia.gov.in/forms/income-tax%20rules/103120000000007845.pdf
Once you have downloaded the form, you can fill out the EPF Form 15G on your own. You will need to know the appropriate amount and provide all the information correctly, which can be done by following the steps below:
- Field 1: Fill out the name as it appears on your PAN Card
- Field 2: Share the PAN Card of the assessed (Without a valid PAN Card, the Form 15G will not be considered)
- Field 3: Provide the status of your income tax, which can be Individual/HUF/AOP
- Field 4: State the previous financial year for which the non-deduction of TDS is being claimed
- Field 5: Provide your complete residential address
- Field 6 - 12: Address and PIN code
- Field 13 and 14: Email and Phone Number for communication purposes
- Field 15(A): Tick ‘Yes’ if you were assessed to tax under Income Tax Act 1961
- Field 15(B): Mark ‘Yes’ if you ticked 15(A) and motion the latest assessment year of returns
- Field 16: Mention the estimated amount for which this assessment is being filed
- Field 17: Mention the estimated income for the previous year
- Field 18: Mention the details of Form 15G, if you filed it for the previous year
- Field 19: Enter the details of your income for which the declaration is being filed
The last section of the EPF Form 15G will require you to fill in the investment details for which the declaration is being filed. You will also enter the investment account number for the term deposit, life insurance policy, employee code, and other details.
So it is best to keep this handy when filling out the form to ensure that they are accurate. Once the EPF Form 15G is filled, you can do the following:
- Log in to the EPFO UAN portal online
- Click on ‘Online Services’ and select the ‘Claim’ option
- Enter the 4 digits of your registered bank account for verification
- Select the ‘I want to apply for' option, and you will get the option ‘Upload Form 15G’
- Upload your filled-out form and submit it
Instructions to Fill Out Form 15G for PF Withdrawal or Other Investments
To fill out Form 15G for withdrawal of PF, fixed deposits, or other financial investments, you can submit Form 15G online. Many banks in India are providing this facility, which can be done if you have a valid net banking facility. Here is the process to follow for the same:
- Log in to your bank’s Internet banking facility using your User ID and password
- Click on the online fixed deposits tab that will take you to the fixed deposit details
- Once on this page, you should see an option to generate Form 15G or Form 15H. Click on the option and fill out the application form
- For this form, you need to input all the relevant details, including your PAN Card number, address, income, and other details
- Once the form is filled, verify the details and information carefully
- Mention the brand details of the bank with which your Provident Fund / Fixed Deposit / Recurring Deposit is held. If you do not have these details handy, you can quickly check it using the bank’s branch locator tools and fill it out
- Once all the information regarding your investment is filled out and you have validated that it is error-free, submit it
What Is the Difference Between Form 15G and Form 15H?
A common misunderstanding is between Form 15G and Form 15H, which are self-declarations that individuals need to submit to their bank or the institutions requesting not to deduct TDS on interest or any other income as per the guidelines.
However, Form 15G and Form 15H are applicable for different criteria, which are as follows:
|Form 15G||Form 15H|
|Applicable for resident individuals or Hindu Undivided Family members or trust that is not a company or a firm with a maximum age limit of 60 years||Applicable for resident individuals who are above 60 years (Senior Citizens)|
|Can be submitted by Hindu Undivided Family members||Can be submitted by an individual only|
|Only applicable to Hindu Undivided Family members who have an income lower than the mentioned threshold||Any senior citizen can fill out Form 15H irrespective of the annual income|
|The tax calculated on your total income is NIL||Not applicable|
Note: Non-resident Indians (NRIs) cannot avail of any benefits from either Form 15G or Form 15H as per regulations.
Things to Keep In Mind Before Investing in Form 15G
- An individual can only submit Form 15G with a valid PAN Card. Failing this, the tax deducted will be 20%, and submitting a copy of the PAN Card with the cover letter is advisable.
- Individuals need to make sure they receive acknowledgments when filling out Form 15G. These are useful if there are any disputes.
- Remember to be honest and double-check all the information that you are providing with Form 15G. Once Form 15G is submitted with PAN, the assessing officer will asses the information for correctness to other banks and will be able to detect any incorrect information submitted.
- The submission of Form 15G is applicable only for the particular financial year, and one needs to submit a fresh declaration for the next year if applicable.However, as per government regulations, the deductor has to retain Form 15G for a period of 7 years. Your previous declarations will also be asked when you fill in the Form 15G declaration for the particular year.
The Fine for Filling Out the Wrong Information in Form 15G
It would be best if you were sure about your filing for Form 15G, and it is recommended to speak with a financial expert on this. There is a penalty for submitting a false declaration using Form 15G, which can lead to a huge fine or even imprisonment under Section 277 of the Income Tax Act 1961.
The punishment includes -
- Imprisonment for a period of 6 months to 7 years if a wrong declaration was provided with the intention to evade tax of more than INR 1 lakh
- Imprisonment between 3 months to 3 years for all other cases
For what purposes can Form 15G be submitted?
Declaration of Form 15G can be submitted to reduce the TDS burden on the following cases:
- TDS on the interest income from a bank deposit
- TDS on Form 15G for Provident Fund withdrawal / TDS on Employee’s Provident Fund
- TDS on interest from Post Office Deposits
- TDS on income from Corporate Bonds or Debentures
- TDS on proceeds from Life Insurance Policy
- TDS on Rental Income
When should you submit Form 15G?
Form 15G is applicable for that particular financial year, so it is necessary to ensure that it is submitted at the beginning of the financial year. As banks deduct TDS each quarter, filling out Form 15G at the beginning of the year will ensure that the bank does not deduct any TDS on your interest income.
It saves the hassle of filing a claim refund on your TDS. If you have not submitted your Form 15G in the first quarter of the financial year, make sure you do so at the earliest so that the TDS is not deducted for the remaining financial year.
If I am a Non-Resident Indian (NRI), do I need to submit Form 15G?
No, NRIs cannot submit Form 15G, as one needs to be a resident of India to be able to fill out and submit this.