Form 15G and 15H: Stop Your Bank Cutting TDS on FD Interest

Every year, lakhs of small savers quietly lose a slice of their fixed deposit interest to TDS they never owed — money they can only chase back months later by filing a tax return. Form 15G and Form 15H exist precisely to stop that from happening. Submitted on time, they tell your bank not to deduct tax at source on your interest income. Submitted wrongly, or forgotten, they cost you nothing in penalties but plenty in locked-up cash and paperwork.

If you live partly on FD interest, or you are a retiree whose income is modest, this is one of the most useful one-page forms in the Indian tax system. Here is exactly how it works, who can use it, and the errors that trip people up.

What TDS on FD interest actually is

When your fixed deposits earn interest beyond a threshold in a financial year, the bank is required to deduct tax before paying you. This is Tax Deducted at Source, and on interest it is 10% if your PAN is on record. Miss the PAN and the rate jumps to 20%.

The threshold matters because most savers sit below it. Following the rationalisation announced in Budget 2025, banks now deduct TDS only once interest crosses 50,000 a year for ordinary depositors, and 1,00,000 a year for senior citizens. These limits are per bank, across all your branches and deposits with that institution, and they count the interest the bank credits or accrues in the year.

The catch is that TDS is deducted regardless of whether you actually owe any tax overall. A retiree whose total income is well within the tax-free zone can still have 10% sliced off simply because one FD threw off more than the threshold. That is the exact gap Form 15G and 15H are designed to close.

Which form is yours

The two forms do the same job but for different people.

• Form 15H is only for resident senior citizens — anyone who is 60 or above at any point in the financial year.
• Form 15G is for everyone else who qualifies: resident individuals below 60, Hindu Undivided Families, and trusts.

Non-residents cannot use either form. Companies and firms cannot use them. And both are declarations of fact, not requests — you are certifying that your income for the year will not attract tax.

Who is actually eligible

This is where most people get it wrong, because the two forms have slightly different tests.

For Form 15G, two conditions must both hold. First, the tax calculated on your total estimated income for the year must be nil. Second, your total interest income should not exceed the basic exemption limit. A working professional with a salary that pushes them into a tax slab cannot file 15G just to dodge TDS on a side FD.

For Form 15H, there is only one condition: the tax payable on your total income for the year, after all deductions and rebates, must be nil. There is no separate ceiling on interest income. This is why seniors get more room. Thanks to the Section 87A rebate, which currently makes income up to a generous limit effectively tax-free under the new regime, a senior citizen can sometimes have fairly substantial income and still legitimately file 15H — as long as the final tax works out to zero.

The honest way to check is to estimate your full-year income, run it through whichever tax regime you will use, and see whether the tax comes to nil. If it does, you qualify. If even a rupee of tax is due, you do not.

How and when to submit

Timing is everything. The form covers one financial year only and does not roll over.

1. Submit in April, at the start of the financial year. If you wait, the bank may already have deducted TDS for the first quarter, and that money is gone until you file your return.
2. Give one form to every bank where you hold deposits, and often to each branch separately. The declaration does not travel between institutions.
3. Use the online route where possible. Most banks now let you file 15G/15H through net banking or the mobile app in a couple of minutes, with an acknowledgement you can save.
4. Keep the acknowledgement. If TDS is wrongly deducted despite a valid form, that proof helps you take it up with the branch.

You will need your PAN, your estimated income for the year, details of other 15G/15H forms you have already filed elsewhere, and the deposit details. Filing without a valid PAN is pointless — the declaration is invalid and TDS gets deducted anyway.

Beyond fixed deposits

These forms are not just for bank FDs. The same declaration can stop TDS on several other income streams, including:

• Interest on post office deposits and recurring deposits.
• Interest on corporate bonds and company deposits beyond the relevant threshold.
• EPF withdrawals before five years of continuous service, where TDS would otherwise apply.
• Income from certain insurance commission and rent, in specified cases.

For an EPF withdrawal in particular, Form 15G can be the difference between getting your full balance and watching 10% disappear, so it is worth asking about when you submit a claim.

The mistakes that cost you

A few traps recur every year, and they are all avoidable.

The biggest is filing the form when you are not eligible. A 15G or 15H is a sworn declaration, and a false one is not a harmless overstep. Under the income tax law, a wrong declaration to evade tax can attract prosecution, with penalties and, in serious cases, imprisonment. If you are unsure whether your tax will be nil, do not gamble — let the TDS be deducted and reclaim it through your return.

The second is forgetting to refile each year. People submit once and assume it is permanent. It is not; a fresh form is due every April.

The third is splitting deposits across banks to stay under the threshold and then not filing at all. Even if no single bank crosses the limit, your total interest still has to be reported as income in your return. The forms reduce TDS friction; they do not reduce the tax you genuinely owe.

And if TDS has already been deducted, there is exactly one remedy: file your income tax return. The deducted amount appears in your Form 26AS and AIS, and a nil liability means a full refund. There is no over-the-counter reversal at the branch once the money has gone to the government.

The bottom line

Form 15G and 15H are small, dull-looking documents that quietly protect the cash flow of retirees and low-income savers. Used correctly — filed in April, to every bank, only when your tax really is nil — they keep your interest in your hands instead of parked with the taxman for a year. Used carelessly, they either do nothing or invite trouble. The discipline is simple: estimate your year honestly, file early, and keep the receipt.