Form 15H is a self-declaration form that individuals need to submit to their banks or financial firms. The document declares the account holder has annual income from income less than the standard income tax exemption. Form 15H must be submitted at the start of each year by anyone over 60 years old who wants to save on taxes. This article will provide a guide on different investment sources where Form 15H will save you money and time with your taxes!
What is Form 15H?
Form 15H is a self-declaration document that permits people to seek exemption from TDS deductions on income produced by interest on Fixed Deposits in Banks deposited within a certain fiscal year, providing they fulfill certain qualifying requirements.
Who is eligible to apply for Form 15H?
Eligibility criteria to apply for Form 15H:
- You must be a resident Indian.
- You must be 60 years old or older.
- Your tax liability must be nil.
- Your income from interest must be more than 50,000 INR.
Why should you file Form 15H?
Form 15H provides a way for the senior citizen to avoid paying taxes on your FD interest.
Banks deduct TDS from your FD interest income before crediting it to your account. But if you have no taxable income, then Form 15H can be used to avoid TDS on FD interest. You just need to declare through the form that the bank should not deduct any tax because of your nil taxable income and submit it to the bank so they will pay out all of your earned interest without taking any taxes first!
However, there are several other functions provided by Form 15H apart from TDS exemption.
Alternative investment sources where Form 15H saves tax deductions
Form 15H is generally used to get exemption from TDS on income from interest earned on fixed deposits. However, its significance extends to other functions as well. These are listed as follows:
1. Tax deducted at source during withdrawal of Provident Fund
The EPFO or Employees Provident Fund Organization is an organization in India that provides retirement benefits and additional wage ceiling to the employees of private companies. If you are a part of this organization and want to withdraw your funds before the completion of 5 consecutive years, you must submit Form 15H. The only condition while submitting this form is the EPF amount should exceed INR 50,000.
2. Tax deducted at source on corporate bonds income
If a person’s earnings from corporate bonds exceed INR 5,000, he or she is eligible for a TDS deduction by submitting Form 15H.
3. Tax deducted at source on earnings from PO deposits
Form 15H is a tax form that individuals can file to claim a TDS reduction on earnings from PO deposits. The Form should only be filed at digitized post offices that collect TDS and not all post offices are digitized. Individuals should contact the post office in which they plan to deposit their money for more information about Form 15H and where it may be filed.
Points to note when filling out Form 15H
Here are some pointers to bear in mind while filling out Form 15H:
- Make sure you’re eligible for Form 15H. It is exclusive for Indian individual residents who are at least 60 years old. If you are below 60 years old, you should file Form 15G.
- Verify the authenticity of all information provided and avoid concealment or distortion of information.
- Ensure you have provided the correct PAN number.
- Specify the proper assessment year.
- If a person is proven ineligible and has given incorrect information on Form 15H to receive tax exemptions, Indian law mandates imprisonment for a minimum of three months.
- Only fill out Part 1 of the form. People seeking TDS exemption are not required to complete Part 2 of Form 15H.
- Please keep in mind that this document is not a replacement for your income tax return, which must be completed and filed separately.
- Check to see whether you received an acceptance receipt from the digitized post office, bank, or any other financial firm where you filed the document. It provides a safeguard in case of a dispute.
- The new Form requires the person to transmit the data of Form 15H to other financial institutions, together with the amount of income from interest stated on the Form.
Form 15H is an important form that should be filed with the income tax returns if you are earning interest on FDs and want to avoid TDS. Missing out on filling this form can result in a deduction of tax from your earned interest, which will only increase as time goes by. Apart from being primarily used to get an exemption for taxes on FD interests, Form 15H also provides help in receiving exemptions in several other investment cases.