Banks deduct a tax deducted at source (TDS) if your interest income on a bank fixed deposit is more than Rs 10,000.
Company fixed deposits on the other hand deduct a TDS if the interest income exceeds Rs 5000. The question that often arises is: Why should I pay a tax od TDS when my total income is below the threshold limit.
This is why you should submit form 15g and 15h. 15h form is for senior citizens above 60, while 15g is for residents under 60.
What is the last date for form 15g and 15h submission?
There is no last date as such for submission of form 15g and 15h. What you need to do know is that the bank will start deducting TDS every quarter. So, let's assume that you opened a fixed deposit on Aug 1, 2015. You should submit the Form 15g or form 15h by Sept 30 for FY 2015-16. Ideally, it should be a few days before this.
You should submit for the next year that is financial year 2016-17 at the start of the financial year. This way no TDS would be deducted.
You can download 15g and 15h forms from the website of banks . Important points to note when submitting these forms.
1. These forms can be submitted only if your income is below Rs 2,50,000.
2. You cannot take into account Sec 80C benefits when submitting form 15g and form 15h. For example, if your income is estimated at Rs 3 lakhs, you cannot say it would reduce to Rs 2 lakhs, because you intend to put Rs 1 lakh in a LIC policy.
3. Senior citizens need to submit form 15h and individuals below 60 can submit for 15g.
4. Do not submit it if your income exceeds above Rs 2.5 lakhs.
5. This forms are to be submitted by resident individuals.
In case your income has now exceeded Rs 2.5 lakhs and the bank or the company has deducted a TDS, you can claim the same when filing your tax returns. Make sure the 15G and 15H form are filled in triplicate. Two are to be submitted to the bank, while the individual can retain the other.
Remember, that you should submit these forms on time and if the bank deducts TDs, you can get it back when you file your income tax returns.