| Overview: Form 15G is a self-declaration that prevents TDS deduction on interest income when your annual income falls below taxable limits. This guide covers eligibility, the filing process, mistakes, and scenarios to help you optimise tax planning and cash flow. |
Understanding Form 15G and Its Role in Indian Income Tax
Form 15G serves as your financial shield against unnecessary tax deductions. When banks or financial institutions earn interest on your deposits, they typically deduct 10% TDS if your annual interest exceeds ₹40,000. However, if your total income for the year remains below the basic exemption limit, you’re essentially paying tax you don’t owe.
Governed by Section 197A of the Income Tax Act, 1961, Form 15G allows eligible individuals to declare nil tax liability upfront. By submitting this form, banks and institutions avoid deducting TDS, helping you retain your money and maintain better cash flow throughout the financial year.
Who Can File Form 15G: Complete Eligibility Breakdown
Understand who is eligible to submit Form 15G and avoid unnecessary TDS deductions.
1. Primary Eligibility Criteria
Form 15G can be filed only if you are an Indian resident below 60 years of age and your total estimated annual income is under the basic exemption limit. NRIs, senior citizens, and those above the limit are not eligible.
For FY 2024-25, the basic exemption limits are:
- Old tax regime: ₹2.5 lakh
- New tax regime: ₹4 lakh
2. Income Types Covered
Form 15G applies to various income sources where TDS gets deducted:
| Income Source | TDS Threshold | TDS Rate |
| Bank FD/RD Interest | ₹40,000 | 10% |
| Corporate Bond Interest | ₹5,000 | 10% |
| Insurance Commission | ₹15,000 | 10% |
| Dividend Income | ₹5,000 | 10% |
| EPF Withdrawals | ₹50,000 | 10% |
3. Entity Types Eligible
Form 15G isn’t limited to individuals. These entities can also file:
- Hindu Undivided Families (HUFs)
- Trusts and associations
- Minors (through guardians)
Important Note: Companies, partnerships, and LLPs cannot use Form 15G.
Step-by-Step Form 15G Filing Process
Follow this simple process to correctly fill and submit Form 15G for hassle-free tax savings.
1. Online Filing Method
Steps to file Form 15G online via bank or tax portal.
- Income Assessment: Calculate your total estimated income from all sources
- Platform Access: Log into your bank’s online portal or mobile app
- Form Selection: Navigate to ‘Tax Forms’ or ‘TDS Exemption’ section
- Details Entry: Fill in personal information, PAN, estimated income, and previous Form 15G submissions
- Digital Submission: Complete e-signature verification via OTP
- Confirmation: Download acknowledgement receipt
2. Offline Filing Process
How to submit Form 15G offline through your bank or institution.
- Form Collection: Download from the bank website or collect from the branch
- Manual Completion: Fill all sections with accurate information
- Documentation: Attach PAN copy and relevant proofs
- Branch Submission: Submit signed form at your bank branch
- Receipt Collection: Obtain acknowledgement from bank official
3. Critical Information Required
Key details you must provide while filling out Form 15G.
- Full name and PAN (mandatory)
- Assessment year details
- Estimated total income for the financial year
- Specific income amount for which Form 15G is being filed
- Details of other Form 15G submissions in the same year
| Bonus Insight: File Form 15G at the beginning of the financial year or immediately after opening new deposits to avoid any TDS deduction. |
Common Scenarios and Practical Examples
Practical cases that show how and when Form 15G comes into play.
1. Successful Form 15G Application
Case Study: Rahul earns ₹1.8 lakh as a salary and ₹45,000 from bank FDs. His total income (₹2.25 lakh) stays below the ₹2.5 lakh exemption limit.
Calculation:
- Without Form 15G: TDS on FD = 10% × ₹45,000 = ₹4,500
- With Form 15G: TDS deducted = ₹0
- Money saved from immediate deduction = ₹4,500
2. Multiple Income Sources Scenario
Example: Sunita has:
- Part-time income: ₹1.2 lakh
- FD interest: ₹35,000
- Insurance commission: ₹18,000
- Total: ₹2.53 lakh (exceeds ₹2.5 lakh limit)
Result: Sunita cannot file Form 15G as her total income exceeds the basic exemption limit.
3. Student/Housewife Scenario
Students and homemakers with only interest income often benefit most from Form 15G. With zero or minimal other income, they can claim complete TDS exemption on interest earnings up to the exemption limit.
Mistakes to Avoid and Penalty Implications
Errors in Form 15G filing can lead to tax notices or penalties — here’s what to watch out for.
1. Common Filing Errors
Frequent mistakes in Form 15G filing include miscalculating income by ignoring all sources, failing to declare submissions across multiple banks, and neglecting annual renewal. Since Form 15G expires every financial year, missing the refile leads to automatic TDS deductions.
2. Penalty Consequences
Submitting false information in Form 15G is an offence under Section 277. Penalties include prosecution, imprisonment of 3 months to 2 years, and fines. The IT department cross-verifies filings, and discrepancies may trigger scrutiny or legal action.
Strategic Tax Planning with Form 15G
Here’s how to use Form 15G smartly as part of your tax-saving strategy.
1. Optimal Filing Strategy
Submit Form 15G early, before your interest income crosses the TDS threshold. Keep copies of all submissions for reference, and monitor total income throughout the year. Pause filings if income nears the exemption limit to avoid penalties.
2. Integration with Other Financial Products
If you’re eligible for an Airtel Finance Personal Loan, surplus funds in fixed deposits with Form 15G protection can boost post-tax returns. Regularly checking your credit score and maintaining compliance also strengthens your financial profile.
| Worth Knowing: Banks share Form 15G data electronically with income tax authorities. This automated system helps prevent misuse while ensuring genuine taxpayers benefit from TDS exemption. |
End Note
Form 15G is more than a tax-saving form. It safeguards cash flow by preventing unnecessary TDS and avoiding refund delays. Smart investors pair it with strategic deposit planning, such as splitting amounts across different tenure fixed deposits to manage annual interest income while maximising TDS exemptions. Evaluating your Airtel Finance Personal Loan eligibility alongside deposits can further optimise outcomes, especially when managing high-interest debt.
Review your Form 15G strategy annually, as income levels, interest rates, and tax laws change. By mastering Form 15G, you stay in control of taxes and cash flow, paving the way for smarter financial management.
FAQs
1. Can I file Form 15G if my income tax liability is zero, but total income exceeds the exemption limit?
No, Form 15G requires your total estimated income to be below the basic exemption limit. Even with zero tax liability due to deductions, exceeding income limits makes you ineligible.
2. What happens if I file Form 15G and later my income increases beyond the exemption limit?
You must immediately inform all institutions where you filed Form 15G. Continuing with false declarations can lead to prosecution under Section 277 of the Income Tax Act.
3. Can I file Form 15G for previous financial years if I forgot to submit initially?
No, Form 15G cannot be filed retrospectively. If TDS was already deducted, you must claim a refund through your annual income tax return filing only.
4. Do I need a separate Form 15G for each bank, or can one form cover multiple institutions?
You need a separate Form 15G for each institution. However, you must declare all other Form 15G submissions in each form to maintain transparency and compliance.
5. Is there any limit on the number of times I can file Form 15G in a year?
There’s no specific limit, but you must ensure your total income from all sources stays below exemption limits. Each submission must declare other Form 15G filings accurately.
