Form 15G and 15H Stop TDS on Bank Interest FY 2026-27
In short: Form 15G (below 60) and 15H (senior 60+) submitted to your bank stop them from deducting 10% TDS on FD/RD interest. Threshold is ₹40K/year for under-60, ₹50K for seniors. Without these forms, TDS sits with IT Department for 9-15 months until you claim refund via ITR. Submit fresh forms every April for every bank. False declaration penalty: ₹10,000 under Section 277.
Why Banks Deduct TDS
Section 194A requires banks to deduct 10% TDS once annual interest from that branch crosses ₹40,000 (₹50,000 for seniors). If your total income is below the basic exemption limit, you owe zero tax but TDS is still deducted. You file ITR later to claim refund. Forms 15G/15H prevent this trap.
Form 15G Below 60
For individuals and HUFs (not companies, partnerships). Requirements: below 60 years; total estimated income for FY below basic exemption (₹2.5L old regime, ₹3L new); tax on total income including the interest is NIL. The form is a self-declaration.
Form 15H Senior 60+
Aged 60+ at any time in the FY; estimated tax liability on total annual income is NIL. With 87A rebate (income up to ₹7L old / ₹12L new), many seniors pay zero tax even with substantial pension+interest income. 15H is more permissive than 15G.
How to Submit
- Download Form 15G/15H from incometax.gov.in or your bank app.
- Fill PAN, name, status, residential status, AY, estimated total income, FD details, expected interest from that bank.
- Submit to each bank separately. One form per bank.
- Submit fresh every April. Valid one FY only.
Cannot Submit If
- NRI (flat 30% TDS regardless)
- Income above exemption (15G) or non-zero tax (15H)
- Companies, firms, AOPs, non-individuals
Senior Bonus 80TTB
Seniors 60+ get a separate Section 80TTB exemption: interest up to ₹50,000 from savings/FD/RD/post-office is tax-free. Stack this with higher 15H threshold and 87A rebate to pay zero tax up to ₹6-8L old or ₹12L new regime.
Form 121 replaces 15G and 15H from 2026-27
Under the Income-tax Rules, 2026, Forms 15G and 15H have been merged into a single declaration, Form 121, for tax year 2026-27 onwards. The conditions are broadly the same: you declare that your estimated tax for the year is nil. Banks and post offices are switching to the new form, so submit Form 121 at the start of each financial year (April) for each bank where you hold deposits.
Worked example: a retired couple
A 66-year-old has pension of ₹5 lakh and FD interest of ₹3 lakh. Interest exceeds the ₹1 lakh senior-citizen TDS threshold, but her total income of ₹8 lakh is below ₹12 lakh, so tax under the new regime is nil after the Section 87A rebate. Because her estimated tax is nil, she can submit the declaration even though interest is above the threshold, and the bank will not deduct TDS.
Common mistakes
- Submitting the declaration when your estimated tax is not nil — this is a false declaration and can attract penalty.
- Forgetting to submit at every bank and for every new deposit.
- Submitting late in the year after TDS is already deducted; claim that TDS back in your ITR instead.
More on interest taxation in tax on FD interest.
FAQs
Do I still use Form 15G/15H in 2026-27?
From tax year 2026-27 they are replaced by Form 121; declarations for FY 2025-26 used the old forms.
Late submission?
Effective from submission date for the rest of the FY. Past TDS goes via ITR refund.
EPF withdrawal?
Yes – 15G/15H stops 10% TDS on EPF withdrawal before 5 years if total income below threshold.
Sources
- IT Act Section 194A; Section 197A; Section 80TTB
- Income Tax Rules 1962 Rules 29C and 29D
