Form 15G

What Is Form 15G? A Guide to Tax Deduction Exemption

Form 15G is a self-declaration document that allows eligible individuals to request exemption from Tax Deducted at Source (TDS) on certain types of income when their total income falls below the basic exemption limit. This document enables taxpayers to prevent automatic tax deductions at source on income such as interest earned from fixed deposits, recurring deposits, and employee provident funds.

The primary purpose of Form 15G is to provide a mechanism for non-senior citizens (individuals below 60 years of age) and Hindu Undivided Families (HUFs) to avoid TDS deductions when they anticipate their annual income will not exceed the taxable threshold. Additionally, this form serves as an official declaration to financial institutions that the declarant’s total income for the relevant financial year is expected to remain below the tax-exempt limit.

For individuals filing under the old tax regime, the basic exemption limit stands at ₹2.5 lakh per annum, while under the new tax regime, this threshold is ₹3 lakh. Furthermore, for those opting for the new tax regime in 2023, the exemption limit has been raised to ₹4 lakh.

According to income tax regulations, banks and financial institutions are mandated to deduct TDS when interest earnings exceed ₹40,000 in a financial year. However, by submitting Form 15G, eligible individuals can prevent this automatic deduction, thereby maintaining full access to their interest income without waiting for tax refunds.

Form 15G consists of two distinct parts:

1. Part 1 – Requires personal information including:
   • Name of the assessee
   • PAN (Permanent Account Number)
   • Mobile number and email
   • Residential address and status
   • Estimated total income for the previous year
   • Signature of the declarant
2. Part 2 – Contains details about:
   • The deductor (bank or financial institution)
   • TAN (Tax Deduction Account Number)
   • Income amount to be paid
   • Date of declaration
   • Unique identification number

It is important to note that Form 15G differs from Form 15H in terms of eligibility criteria. While Form 15G is specifically designed for individuals below 60 years of age and HUFs, Form 15H serves senior citizens aged 60 years and above. Both forms serve the same purpose of preventing TDS deductions but cater to different age demographics.

For Form 15G to be valid, a taxpayer must fulfill certain conditions:

• Must be an Indian resident
• Age should be below 60 years
• Total taxable income must be below the basic exemption limit
• PAN must be provided (mandatory requirement)

Each Form 15G submission remains valid only for one financial year ending on March 31st. Consequently, eligible individuals must submit a new form at the beginning of each financial year to maintain their TDS exemption status.

The form can be submitted to various entities including banks, post offices, bond issuers, and the Employees’ Provident Fund Organization (EPFO). Many financial institutions now offer online submission facilities through their banking portals or mobile applications, simplifying the process for customers.

Misuse of Form 15G by providing false declarations solely to avoid TDS can result in penalties and even imprisonment under Section 277 of the Income Tax Act, 1961. Therefore, individuals should ensure they meet all eligibility criteria before submitting this declaration.

Who is eligible to submit Form 15G?

Eligibility for submitting Form 15G depends on several specific criteria related to age, residency status, income levels, and tax liability. The form is primarily designed for resident Indians below 60 years of age and Hindu Undivided Families (HUFs) whose total income falls below the basic exemption limit.

To qualify for submitting Form 15G, individuals must meet all of the following conditions:

• Must be a resident of India
• Age must be less than 60 years
• Total taxable income should not exceed ₹2.5 lakh under the old tax regime or ₹3 lakh under the new tax regime
• Must have no tax liability for the financial year in question
• Must possess a valid PAN (Permanent Account Number)

It’s important to note that Form 15G differs from Form 15H, which serves a similar purpose but is designed exclusively for senior citizens aged 60 years or above. Unlike Form 15G, senior citizens can submit Form 15H even if their interest income exceeds the basic exemption limit, provided their total taxable income (after deductions) remains below the applicable exemption threshold.

For individuals below 60 years, Form 15G can only be submitted if their interest income is less than the basic exemption limit. Nevertheless, if an individual’s combined interest income and other income sources remain below the applicable basic exemption limit resulting in zero tax liability, they may still submit Form 15G to avoid TDS deductions.

Hindu Undivided Families with annual income not exceeding ₹2.5 lakh are also permitted to submit Form 15G. Besides individuals and HUFs, other entities like trusts and associations may qualify to submit Form 15G, provided they meet the income criteria.

Certain entities and individuals are explicitly excluded from submitting Form 15G. These include companies (both private and public), partnership firms, and Non-Resident Indians (NRIs). Moreover, any individual whose total income exceeds the basic exemption limit is not eligible to submit Form 15G.

Consider this example to understand eligibility better: A 45-year-old individual earning ₹2,40,000 annually, including ₹20,000 from fixed deposit interest, can submit Form 15G since their total income falls below the exemption limit. In contrast, an individual aged 50 years with a total taxable income exceeding ₹2.5 lakh would not qualify for submitting Form 15G.

The income thresholds for eligibility have been updated over time. Some institutions now recognize the basic exemption limit as ₹4,00,000 for individuals below 60 years submitting Form 15G. This reflects changes in tax structures across different financial years.

It’s worth emphasizing that Form 15G/15H benefits are exclusively available to residents; non-residents cannot avail these exemptions regardless of their income levels. Additionally, the form must be submitted afresh each financial year, as it remains valid only for the specific period ending March 31st.

Submitting Form 15G while not meeting the eligibility criteria constitutes a false declaration that may result in penalties under the Income Tax Act. Therefore, individuals should carefully assess their eligibility before submission.

Know how to fill Form 10C to withdraw the pension amount accumulated in your EPS account.

When and where should Form 15G be submitted?

Submitting Form 15G requires precise timing and should be directed to specific institutions where TDS might be applicable. The form remains valid for a single financial year ending on March 31st, making it essential to resubmit annually. For optimal tax planning, individuals should file this document at the beginning of each financial year, preferably by April 1st.

Banks and financial institutions

Financial institutions typically require Form 15G submission before the commencement of the financial year for which TDS exemption is sought. The process generally involves:

1. Completing the form with personal details including name, PAN, address, and other relevant information
2. Attaching a self-attested copy of your PAN card
3. Submitting these documents to the bank or financial institution

Many banks now offer digital submission options through their internet banking portals or mobile applications, significantly simplifying the process. For instance, ICICI Bank allows customers to submit Form 15G online through internet banking and their iMobile application. Similarly, Federal Bank offers submission through their Fed-e-Point service.

TDS deduction becomes applicable primarily when interest income exceeds ₹40,000 in a financial year for regular assessees or ₹50,000 for senior citizens. Although there is technically no strict deadline for submission, timely filing at the beginning of the financial year ensures continuous exemption from TDS deductions.

EPFO for PF withdrawals

For Employee Provident Fund withdrawals, Form 15G becomes particularly relevant in specific scenarios:

• When withdrawing EPF balance before completing five years of continuous service
• When planning to withdraw more than ₹50,000 from an EPF account with service years less than five

The fundamental requirement for Form 15G submission to EPFO remains the same—the tax due on the individual’s entire income, including the withdrawn EPF balance, must be zero. This makes the form applicable exclusively to those whose total income falls below the basic exemption limit despite the EPF withdrawal.

Essentially, the EPFO accepts Form 15G as a declaration that allows them to release the EPF amount without deducting TDS, even when the withdrawal occurs before the standard five-year maturity period.

Post offices and insurance companies

Post offices that have been digitalized also deduct TDS and accept Form 15G submissions. Unlike some financial institutions, India Post currently doesn’t offer online submission facilities for Form 15G/15H—individuals must visit their home branch post office in person.

In addition, Form 15G can be submitted in the following scenarios:

• To insurance companies when commission exceeds ₹15,000 per financial year—insurance agents can submit this form requesting non-deduction of TDS if their total income falls below the taxable threshold
• For corporate bonds and dividend payments where applicable TDS thresholds are crossed
• To landlords/tenants for rent exceeding ₹2.4 lakh annually (applicable from April 1, 2019)

Virtually every institution responsible for TDS deduction accepts Form 15G, including cooperative banks and companies that distribute interest income from investments. The form must be submitted separately to each institution or branch where you maintain accounts generating interest income.

It’s worth emphasizing that despite the varying submission locations, the fundamental purpose remains consistent—preventing TDS deduction on interest income when the individual’s total income falls below the applicable tax threshold. In each case, a valid PAN is mandatory for submission.

How to fill Form 15G step-by-step

Completing Form 15G correctly requires attention to detail as it contains multiple fields across two distinct parts. The form must be filled with accurate information to ensure valid TDS exemption.

Personal and contact details

Initially, focus on the first section of Part 1 where personal information must be entered:

1. Name of Assessee (Declarant): Enter your name exactly as it appears on your PAN card
2. PAN of Assessee: Input your valid PAN number – this is mandatory and the fourth letter must be ‘P’ or the declaration will be invalid
3. Status: Specify your tax status (Individual/HUF)
4. Previous Year: Select the financial year for which you’re claiming TDS exemption
5. Residential Status: Mark ‘Resident’ as NRIs cannot submit Form 15G
6. Address: Enter your complete address, preferably matching your Aadhaar card, including PIN code
7. Email ID and Phone Number: Provide valid contact information for future communications

Income and tax declaration

Subsequently, complete the income declaration fields:

8. Whether assessed to tax: Mark ‘Yes’ if you filed an ITR in any previous year
9. Latest assessment year: Mention the most recent assessment year from your latest ITR
10. Estimated income for declaration: Enter the estimated amount for which you’re seeking TDS exemption
11. Estimated total income: Indicate your anticipated total income from all sources for the relevant financial year
12. Details of other Form 15G filed: If you’ve submitted Form 15G elsewhere during the same financial year, provide those details and the aggregate income amount

Investment and account details

Afterwards, complete the investment information section:

13. Investment identification number: Enter account numbers, policy numbers, or employee codes as applicable
14. Nature of income: Specify the type of income (interest, dividend, etc.)
15. Section under which tax is deductible: Mention the applicable Income Tax Act section
16. Amount of income: State the exact income amount

Signature and submission

Finally, verify all entered information thoroughly before submission:

1. Cross-check all details to avoid errors
2. Sign the form – for HUFs, mention your capacity when signing
3. Attach a self-attested PAN card copy
4. Submit the completed form to your bank or financial institution before April 1st of the financial year

Apart from physical submission, many banks now offer online submission through their internet banking portals or mobile applications, making the process more convenient.

Check out this blog on Form 12C, a complete guide for income declaration.

Where can Form 15G be used to avoid TDS?

Form 15G functions as a versatile tool for avoiding Tax Deducted at Source (TDS) across various income sources. This declaration enables eligible individuals to prevent automatic tax deductions in multiple financial scenarios, provided their total income remains below the taxable threshold.

Interest on fixed deposits

Fixed deposits constitute one of the primary areas where Form 15G proves beneficial. Banks are mandated to deduct TDS when interest income exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). By submitting Form 15G to the bank where the fixed deposit is maintained, eligible individuals can receive their interest amounts without TDS deductions. 

Many financial institutions now offer online submission facilities through their banking portals or mobile applications, making this process more convenient. Notably, this exemption applies to recurring deposits as well, as TDS provisions apply similarly to RD interest earnings.

EPF withdrawals

For Employee Provident Fund withdrawals, Form 15G becomes relevant when:

• Withdrawing EPF balance before completing five years of continuous service
• The withdrawal amount exceeds ₹30,000

Without Form 15G submission, TDS is deducted at 10% if PAN is provided or at the maximum marginal rate (34.608%) if PAN is not submitted. Hence, providing both PAN and Form 15G together is essential for avoiding TDS altogether on premature EPF withdrawals. Each Form 15G submission remains valid only for one financial year, necessitating fresh submission for subsequent withdrawals.

Corporate bonds and dividends

TDS applies on income from corporate bonds when it exceeds ₹5,000. Similarly, dividend income exceeding ₹5,000 attracts TDS deductions. In both cases, Form 15G can be submitted to the issuing company or dividend-paying entity requesting non-deduction of TDS. This exemption mechanism applies exclusively to individuals whose total income falls below the basic exemption limit despite these additional income sources.

Rent and insurance commission

From April 1, 2019, Form 15G can be utilized for preventing TDS on rental income exceeding ₹2.4 lakh annually. Tenants can accept this form from landlords whose total income remains below the taxable threshold, thereby avoiding TDS deduction obligations.

Likewise, insurance agents earning commissions exceeding ₹15,000 per financial year can submit Form 15G to insurance companies. Under section 194D of the Income Tax Act, such commissions normally attract TDS, yet agents with no tax liability can secure exemption through proper Form 15G submission. For this exemption to be valid, the aggregate of incomes like commission should not exceed the maximum non-taxable amount as per section 197A(1B).

What happens if Form 15G is misused?

Misusing Form 15G by filing a false declaration carries serious repercussions under Indian tax laws. This critical aspect of income tax compliance deserves careful attention from all taxpayers contemplating TDS exemptions.

Penalty for false declaration

Filing Form 15G incorrectly or fraudulently constitutes tax evasion and attracts prosecution under section 277 of the Income Tax Act, 1961. A declaration is deemed false whenever an individual submits Form 15G to avoid TDS deduction even though their income exceeds the maximum exemption limit or their tax liability is not nil. Further, making any wrong declaration to evade taxes subjects the declarant to substantial financial penalties alongside potential imprisonment.

Legal consequences under Income Tax Act

The legal framework establishes a two-tier punishment structure based on the amount of tax evaded through false Form 15G declarations. For cases where the tax sought to be evaded exceeds ₹25 lakhs, imprisonment ranges from six months to seven years plus applicable fines. Conversely, for lesser amounts, the prison term spans from three months to two years along with monetary penalties. Throughout this process, the burden of proof rests with the taxpayer to demonstrate their declaration was made in good faith.

Beyond criminal proceedings, if a taxpayer’s actual tax liability proves non-zero contrary to their Form 15G declaration, additional interest charges and penalties may apply. Thus, individuals should thoroughly assess their eligibility criteria prior to submission, as mere convenience of avoiding TDS cannot justify improper use of this exemption mechanism.

Key Takeaways

Form 15G is a powerful tax tool that helps eligible individuals avoid unnecessary TDS deductions, but it requires careful compliance to prevent serious legal consequences.

• Form 15G allows individuals under 60 and HUFs to avoid TDS when total income stays below ₹2.5-4 lakh exemption limits

• Submit Form 15G annually before April 1st to banks, EPFO, and financial institutions for interest, EPF withdrawals, and other income sources

• Complete all sections accurately including personal details, income estimates, and investment information with mandatory PAN attachment

• Use Form 15G for fixed deposits, EPF withdrawals, corporate bonds, dividends, rent, and insurance commissions exceeding TDS thresholds

• False declarations can result in 3 months to 7 years imprisonment plus penalties under Section 277 of Income Tax Act

Form 15G serves as an essential compliance tool for tax-efficient financial planning, but only when used legitimately by eligible taxpayers whose actual income supports their declarations.

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