Understanding No Tax Deduction via Forms 15G & 15H: A Simple Guide

If you’re earning on fixed deposits, dividends, or other income sources and wondering how to avoid tax being deducted at source, this article breaks down the essentials of using Form 15G and Form 15H—in plain, everyday language.

What are Form 15G and Form 15H?

• Form 15G: A self-declaration form used by resident individuals below senior citizen age for certain incomes, so tax isn’t deducted at source.
• Form 15H: Similar declaration but for resident senior citizens (age 60+).

These forms essentially say: “Based on my estimated income, I’m not liable for tax, so please don’t deduct tax at source from this payment.”

When can you use these forms?

You can file these forms before tax is deducted at source (TDS) if the following conditions apply:

1. Your estimated total income for the year results in zero tax liability (i.e., after deductions/rebates, you expect no tax payable).
2. The payer (bank, tenant, mutual fund, etc.) allows such a declaration.
3. Depending on whether you’re a non-senior or senior citizen:
4. Non-senior (Form 15G): For incomes like interest on securities, interest other than securities, rent, dividends etc. Under sections such as 192A, 193, 194A, 194D, 194DA, 194I, 194K.
5. Senior citizen (Form 15H): Same types of incomes but for those aged 60+ (with benefit of rebate under section 87A).
6. The amount you receive under these incomes is such that your overall income remains below the taxable threshold (after applicable rebates).

How to submit the declaration

• Prepare the respective form (15G or 15H) in duplicate (paper) or electronically if available.
• Submit it to the payer (for example, your bank or mutual fund house). Provide your PAN (Permanent Account Number) and other details as required.
• Once accepted, the payer won’t deduct TDS on the applicable income.
• Important: If your income estimate changes during the year (for example you suddenly earn more), you should update your declaration.

What the payer must do?

The person/organisation paying you must:

• Assign a Unique Identification Number (UIN) to each Form 15G/15H received:
  • First character: ‘G’ for Form 15G or ‘H’ for Form 15H.Next 9 digits: a sequence number.
  • Followed by the financial year and the payer’s TAN (Tax Deduction & Collection Account Number).
• Digitise any paper submission and upload the details quarterly to the income-tax e-filing portal.

Even if no TDS is deducted (because of the form), the payer must report the transaction in the quarterly TDS statement quoting the UIN.

How long must the declaration be kept?

The payer must retain the form (paper or scanned copy) for 7 years from the end of the financial year in which it was submitted. One reason: the tax authorities may want to check or verify the form even years later.

Key points to remember

Filing Form 15G/15H doesn’t mean you’re exempt from paying tax entirely; it means you expect no tax liability for that income. If you later owe tax, you’re still responsible.

If you expect your income to exceed the threshold or tax liability changes, do not submit the form, or you must withdraw/modify it.

If the payer fails to upload or report properly, there could be complications (for both payer and you).

Senior citizens get a rebate under section 87A which helps them qualify under Form 15H if their total income is below that limit.

Only some types of income are eligible for these declarations—check the applicable sections (192A, 193, 194A, 194D, 194DA, 194I, 194K, 194EE etc).

Why is this important for you?

If you’re a resident individual (especially a modest income earner or a senior citizen), this offers a useful tool to avoid unnecessary tax being deducted at source—thus ensuring you don’t end up with less cash in hand all year. It also avoids the extra work of claiming refunds later if TDS was deducted unnecessarily.

Imagine you’re a senior citizen who has invested in certain interest-bearing instruments and your total income is so low that your tax is nil: by submitting Form 15H at the start, you save the hassle of TDS and the effort of claiming refund later.

In summary: If you expect your total income to be below the taxable threshold, and you’re earning income where tax is normally deducted at source, Form 15G (for non-seniors) or Form 15H (for seniors) lets you declare to your payer that “no tax need be deducted”. The payer uses your form, assigns a UIN, uploads the details, and you keep more of your money in hand rather than waiting for a refund.

It’s a small but smart step in tax planning for many taxpayers—just ensure you meet the conditions, estimate your income wisely, and keep track of any changes in your income situation.