There would hardly be anybody who invests in fixed deposits, but is not aware of these forms which are filled up and submitted at the time of opening the deposit for exemption from tax being deducted at source on the interest income earned.

So, why does the need arise to write on such a commonly known topic? The fact that most people do not know the difference between the two and whether they are eligible to get this exemption.I personally know a few of them who fall in the income tax bracket as they have other income sources, but still fill up this form just because they are now retired and do not earn a salary. Likewise, there are people who do not submit this form inspite of their total income being less than the taxable limit and end up paying tax at source, and the only way they can claim a refund is while by filing their returns.

Form 15 G and form 15 H – The basic difference

1. Form 15 G is for people who are below 60 years of age or not senior citizens; while form 15 H is for senior citizens aged 60 years and above.
2. Form 15 G can be used by individuals and HUFs( Hindu Undivided Family) , but form 15 H is only for individuals who are senior citizens.
3. For senior citizens to be eligible to fill up form 15 H , the basic conditions are that one should not have had any tax liability in the previous year and the tax paid by him/her should be NIL; and the total taxable income from all sources this year including the interest income should be within the tax exemption limit. But for non senior citizens to be eligible to fill form 15 H, there is an additional condition that the total interest other than interest on securities should not be more than Rs 1,00,000/- in that assessment year. Let us understand this with an example.

Mr. A aged 61 years and Mr. B aged 59 years are good friends and both retired from their  respective jobs last year. They do not have any other source of income and have about 20 Lakhs each with them which they got as terminal benefits. They invest the same in fixed deposits on which they earn around 1.8 lakhs as annual interest. While Mr A can fill form 15 H for TDS exemption as his overall income is non taxable, Mr B cannot claim this exemption even though his final tax libility is NIL by furnishing form 15 G as his total interest income crosses the maximum exemption limit of Rs 1,00,000/- per annum.

Some other things to keep in mind

• Form 15 H and form 15 G should be given to the bank at the beginning of the financial year.
• Each form submitted is valid for only one financial year, a new one has to be submitted every year, the reason being that the depositors’ tax status could change from one year to another.
• These forms are usually required to be filled in duplicate, and if the investor holds two different deposits in two different branches of the same bank, separate forms have to be furnished at both places.