Form 15G

What Is Form 15G?

Form 15G is a declaration used by Indian taxpayers who earn income that is subject to tax deduction at source (TDS) but are not liable to pay income tax. The primary purpose of this form is to ensure that TDS is not deducted on your income if your total income is below the taxable limit. In simpler terms, it's a way to avoid paying tax on your earnings when you're exempt from it.

For example, if you're earning interest from a fixed deposit, the bank might deduct tax at source. If your total income is below the taxable limit, you can fill out Form 15G to prevent them from deducting tax.

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Why Is Form 15G Important?

Form 15G can save you a lot of hassle by reducing unnecessary deductions. It’s especially helpful if you’re earning a pension, interest, or dividends, which are subject to TDS. Instead of dealing with TDS now and claiming a refund later, Form 15G allows you to prevent the deduction altogether.

For instance, let’s say you’re earning interest from a bank deposit, and the bank plans to deduct TDS on that interest. If your total annual income is below the taxable limit, you can submit Form 15G to prevent TDS from being deducted in the first place. This way, you avoid the lengthy process of filing a tax return and waiting for a refund.

Who Can Submit Form 15G?

Form 15G can be filed by an individual, Hindu Undivided Family (HUF), or a trust. However, not everyone is eligible to submit this form. Let’s dive into the eligibility criteria.

Eligibility Criteria for Form 15G

To submit Form 15G, you must meet the following requirements:

1. Age: You can submit Form 15G if you're under the age of 60. People above 60 typically use Form 15H, which serves a similar purpose but is meant for senior citizens.
2. Income Level: The most important condition for submitting Form 15G is that your total income should be below the taxable limit. For instance, if your total income (including interest, salary, etc.) is below the basic exemption limit (which is ₹2.5 lakh for individuals below 60), you can submit this form.
3. Taxable Income: Your taxable income should be zero or below the taxable limit. If the TDS deduction from your earnings exceeds your liability, you can claim a refund, but it’s far more convenient to avoid the deduction in the first place using Form 15G.
4. No Claim for Deductions: You cannot claim deductions like 80C (investment deductions) or 80D (insurance premiums) for a higher taxable income. The form is strictly for individuals whose total income falls below the taxable limit.

How to Fill Out Form 15G?

Now that you know the basics, let’s dive into the process of filing Form 15G. It’s relatively straightforward and can be done in just a few steps.

Step 1: Obtain the Form

The form is available online and can be downloaded from the income tax website or directly from banks where you need to submit it. Most banks also provide Form 15G on request.

Step 2: Fill in Your Details

The form requires you to provide basic details such as:

• Name: Your full legal name.
• PAN (Permanent Account Number): Your unique identification number issued by the Income Tax Department.
• Address: Your residential address.
• Date of Birth: To establish your eligibility.
• Income Details: Mention the income from various sources, such as interest, dividends, etc.

Step 3: Declaration

The form has a section where you declare that your total income for the financial year is below the taxable limit and hence no tax should be deducted. This is a simple declaration that you are not liable for tax.

Step 4: Submit the Form

Once you’ve filled in the form, submit it to the concerned bank or institution. The form can be submitted physically at the bank or uploaded digitally if the bank provides that option.

When Should You Submit Form 15G?

Form 15G is typically required when you are opening a new fixed deposit or recurring deposit, or if you expect income from interest, dividends, or other sources. It should be submitted:

1. At the Beginning of the Financial Year: If your income is below the taxable limit, submit Form 15G at the beginning of the financial year to avoid TDS deductions from the outset.
2. For Each Year: It is a yearly process. You must submit a fresh form each year for the institution to take your tax liability into account for the new year.
3. Change in Income: If your income increases and crosses the basic exemption limit, you will need to stop using Form 15G and inform the concerned institutions about the change in your tax status.

Common Mistakes to Avoid While Submitting Form 15G

While Form 15G is fairly simple to fill out, some common errors can cause delays or complications in the process. Here are some tips to avoid them:

1. Incorrect PAN: Always double-check your PAN to ensure it matches your income tax records. If the PAN is incorrect, the form will be rejected.
2. Overestimating Eligibility: Don’t assume you are eligible unless you’re certain your income is below the taxable limit. If you’re not sure, it’s better to consult a tax expert.
3. Incomplete Information: Make sure all required fields are filled out, including income details, so that there are no delays or confusion.

Key Benefits of Submitting Form 15G

1. No Tax Deduction at Source (TDS)

The primary benefit of Form 15G is that it helps prevent tax from being deducted at source. This is especially useful for retirees or individuals earning income from fixed deposits.

2. Avoiding Refund Hassles

By submitting Form 15G, you can avoid the trouble of filing a tax return just to claim a refund. The process becomes much smoother and quicker when you ensure TDS isn’t deducted in the first place.

3. Simplifies Tax Filing

Not having TDS deducted means you won’t need to go through the process of adjusting your taxes later in the year, simplifying your annual filing.

Save Your Tax with Form 15G

Form 15G is an incredibly useful tool for individuals who wish to avoid unnecessary TDS deductions and streamline their tax processes. As long as you meet the eligibility criteria, this form can help you save time and effort in claiming refunds. Make sure you file it on time and ensure all your details are accurate.