Form 15G/15H: Avoid TDS on FD Interest

Every year, banks deduct 10% TDS on Fixed Deposit interest that exceeds ₹40,000 (₹50,000 for senior citizens). For individuals whose total income is below the taxable limit — homemakers, retirees with moderate savings, students — this TDS is an unnecessary cash flow hit. You eventually get it refunded when filing ITR, but that takes months.

The simpler solution is to submit Form 15G or Form 15H at the start of the financial year. This tells the bank not to deduct TDS because your estimated tax liability is nil. To check how much interest your FDs will earn and whether TDS applies, use our FD Calculator. For choosing the best FD rates, read our Best FD Rates guide.

When Does the Bank Deduct TDS on FD Interest?

Under Section 194A of the Income Tax Act, banks and post offices deduct TDS at 10% on interest income when the total interest from all FDs and RDs with that bank exceeds ₹40,000 in a financial year (₹50,000 for senior citizens aged 60+). Key points:

• TDS is deducted on accrued interest, not just interest paid. Even if your FD is cumulative (interest reinvested), TDS is deducted each year on the accrued interest.
• The ₹40,000/₹50,000 threshold is per bank, not per FD. Interest from all your FDs with the same bank is aggregated.
• If PAN is not provided to the bank, TDS is deducted at 20% instead of 10%.
• TDS is deducted even if the interest is reinvested (cumulative FD) — the bank credits interest notionally and deducts TDS from your account or adjusts it against the FD.

Eligibility for Form 15G

Form 15G is for residents below 60 years of age. You must meet both conditions:

1. Estimated tax liability for the year is nil: Your total income from all sources (salary, FD interest, rental income, capital gains, etc.) should be such that after applying deductions and exemptions, the tax payable is zero.
2. Total interest income does not exceed the basic exemption limit: Under the New Regime, this is ₹3 lakh. Under the Old Regime, it is ₹2.5 lakh. Note: this condition checks only interest income, not total income.

In practice, Form 15G is most relevant for:

• Homemakers with FDs in their name and no other income
• Students with FDs from scholarships or gifts
• Individuals with very low income and savings in FDs
• Retired persons below 60 with income below the exemption limit

Eligibility for Form 15H (Senior Citizens)

Form 15H is exclusively for senior citizens (60 years and above). The eligibility is more relaxed — you only need to meet one condition: the estimated tax on your total income for the year is nil. The total income can exceed the basic exemption limit, as long as after deductions (80C, 80D, 80TTB) and rebate (Section 87A), the final tax is zero.

Senior citizens also get a higher TDS threshold of ₹50,000 (vs ₹40,000 for others) and a special deduction of ₹50,000 under Section 80TTB for interest income from deposits.

How to Submit Form 15G/15H

Online Submission (Recommended)

Most banks now accept Form 15G/15H through their net banking portal. Log in, navigate to the Fixed Deposit section, and look for the "Submit Form 15G/15H" option. Fill in your details — PAN, estimated total income for the year, estimated interest income from that bank, and the previous year's Form 15G/15H details if applicable. Submit before the first interest credit date of the year (usually April or the FD anniversary date).

Offline Submission

Download Form 15G/15H from the Income Tax website or your bank's website. Fill in the required details, sign, and submit to your bank branch. You need to submit a separate form to each bank where you hold FDs. Keep a copy with the bank's acknowledgement stamp for your records.

Key Details to Fill in the Form

• Estimated total income: Include all sources — interest, rent, pension. If you under-report and are later found to have taxable income, penalties apply.
• Estimated income from each source: Report interest from each FD separately or as an aggregate for that bank.
• Previous year details: If you submitted Form 15G/15H last year, mention the aggregate interest and number of forms submitted.
• PAN: Mandatory. Without PAN, TDS is deducted at 20%.

Common Mistakes to Avoid

• Submitting when income is taxable: If your total income exceeds the exemption limit, do not submit Form 15G. This is a punishable offence. You will still owe tax on the interest income.
• Forgetting to submit every year: Form 15G/15H is valid for one financial year only. Submit fresh forms every April.
• Not submitting to all banks: If you have FDs with multiple banks, submit the form to each bank separately. One bank does not notify another.
• Ignoring cumulative FDs: TDS is deducted on accrued interest even for cumulative FDs. Submit Form 15G/15H for these as well.
• Confusing 15G and 15H: If you are 60+, use Form 15H (more relaxed eligibility). Using the wrong form may cause the bank to reject it.

What If TDS Was Already Deducted?

If you did not submit Form 15G/15H in time and TDS was deducted, you can claim it as a refund when filing your ITR. Report the FD interest as income, apply relevant deductions, and if your tax liability is nil, the entire TDS is refunded. Track TDS credits in Form 26AS to ensure the bank has deposited the TDS with the government.

To compute your FD maturity and annual interest for planning purposes, use our FD Calculator.