What Are Forms 15G and 15H and What Are Their Uses?

Individuals who invest in fixed deposits have to pay a certain amount of tax on the interest that they earn from the FDs. Banks and financial Institutions deduct this amount from the source before providing interest to their customers. As a result, it is known as TDS (Tax Deducted at Source).

Form 15H and 15G can be used to get an exemption from TDS if you are eligible for the same. Form 15G can be used by anybody to get an exemption from TDS whereas form 15H is only applicable for senior citizens i.e., people who are at least 60 years or older. These forms are valid only for one financial year. Therefore, you will have to fill any one of these forms each year to ensure that TDS is not deducted from your net income.

Now let us see who all are eligible for TDS exemption i.e., who all can fill form 15H and 15G to avail TDS exemption:

• To be eligible to fill a 15G form, the tax liability of a person must be zero, and the net income of the person should not be greater than INR 2,50,000 per annum. It can only be used by members of HUF (Hindu Undivided Family) and trusts. Organizations and firms cannot avail this rebate.
• To be eligible to fill a 15H form, a person’s age should be 60 years or more, and the total income of the person should not be taxable according to the Income Tax Act.

Also, the investors must ensure that they fill these forms at the beginning of the financial year to avoid the tax deduction that takes place in the initial part of the year.

TDS calculation on fixed deposit interest

TDS is only deducted if your total interest earnings from FDs in a financial year exceed INR 40,000. Also, if you are a senior citizen, then TDS is only deducted if your interest earnings are greater than INR 50,000.

Therefore, a TDS of 10% of the net interest earnings will be deducted if the interest earned through the fixed deposits is greater than 40,000 or 50,000 (depending on your age). Also, if you fail to provide your PAN card details while applying or submitting FD form, then you are eligible for a 20% TDS deduction.

To understand how TDS on fixed deposits is calculated, you need to know that the TDS depends on the interest income and not on the net income of the investor.

Offset TDS deduction with high interest earnings

NBFCs like Bajaj Finance provide high-interest rates on FDs.Therefore, you can easily offset the effect of TDS deduction with high interest earnings from Bajaj Finance FD. Here are some more benefits of investing in Bajaj Finance FD:

High-interest rates – With these FDs, the interest rates can be as high as 8.95%, which is much more than the interest rates provided by bank FDs. You can earn ROI (Return on Investment) up to 54%. This is an excellent option for retirees to boost their future savings.

Investor Type	Interest  rates	Amount	Tenor	Return	ROI
New customer	8.6%	Rs. 25,000	5 years	Rs. 12,765	51%
Senior citizens	8.95%	Rs. 25,000	5 years	Rs. 13,377	54%
Existing customers	8.85%	Rs. 25,000	5 years	Rs. 13,202	53%

Flexible tenor – With Bajaj Finance FDs, you can invest your savings for a period of 12 to 60 months as per your choice. Moreover, you can also choose to earn periodic interest payouts such as monthly, quarterly, six-monthly, or annual interest payouts to supplement your expenses. This feature proves to be helpful for retirees who do not have a steady flow of regular income.

Safety – Bajaj Finance FDs are rated for their safety and stability by third-party credit rating agencies like ICRA and CRISIL. Therefore, your savings are safe from market fluctuations.

You can start investing in these fixed deposits with a minimum investment of Rs. 25,000 and ladder your investments across different time frames to benefit from changing interest rates. You can also estimate your returns accurately with the help of an FD calculator which calculates the interest and maturity amount based on the principal amount, FD type, and tenor chosen by you.