You checked your bank statement and saw a deduction labeled "TDS on Interest."
You are confused. "I am a student/homemaker. I don't even have a job. Why is the bank taking my money?"
The Reason: According to Income Tax rules, if your interest income from Fixed Deposits (FD) exceeds the threshold, the bank MUST deduct 10% TDS automatically.
The Solution: You can stop this legal robbery by submitting a simple declaration called Form 15G or Form 15H.
Disclaimer: Submitting this form falsely (if you have high taxable income) is illegal. Use it only if your estimated tax liability is ZERO.
Bank Deducting Tax on Your FD Interest? Stop It Now!
1. New Limits for 2025 (Budget Update)
Good news! The government has increased the TDS limits for FY 2025-26:
- For General Citizens (< 60 yrs): No TDS if interest is up to ₹50,000 (previously ₹40,000).
- For Senior Citizens (60+ yrs): No TDS if interest is up to ₹1,00,000 (previously ₹50,000).
Example: If you are a senior citizen earning ₹90,000 interest, the bank will now pay you the full amount without cutting a single rupee. No form needed!
2. Form 15G vs. Form 15H (Which One for You?)
If your interest exceeds the limits above, but your total income is still low, submit one of these forms:
| Feature | Form 15G | Form 15H |
|---|---|---|
| Who? | Individuals below 60 years (and HUFs) | Senior Citizens (60+ years) |
| Condition 1 | Final Tax Payable must be ZERO. | Final Tax Payable must be ZERO. |
| Condition 2 (The Trap) | Total Income must be < Basic Exemption Limit (₹2.5L Old / ₹4L New). | NO Income Cap. (You can submit even if income is ₹7 Lakhs, as long as tax is zero via Rebate). |
3. When to Submit? (Timing is Key)
This is not a one-time thing. You must submit it at the start of every Financial Year.
- Best Time: April 1st to April 15th.
- Why? If you wait until June, the bank might have already deducted TDS for the first quarter. Getting a refund later requires filing an ITR, which takes months.
4. How to Submit Online (No Branch Visit Needed)
Most major banks (SBI, HDFC, ICICI, Axis) allow instant online submission:
- Log in to NetBanking or Mobile App.
- Go to the "Services" or "Tax Centre" tab.
- Select "Form 15G/H".
- Fill in your estimated income details and PAN.
- Enter OTP. Done! (Save the acknowledgement PDF).
5. Can I Use It for PF Withdrawal?
Yes!
As discussed in our EPF post, early withdrawal (>₹50k, <5 attracts="" br="" high="" tds.="" years="">
If your total income is below the taxable limit, upload Form 15G on the EPFO portal while filing your claim. This ensures you get the full amount without the 10-20% cut.
Save Every Rupee
Why give the government an interest-free loan? If the bank deducts TDS, that money is locked until you file your returns next July.
Check your FD interest today. If it's high, submit Form 15G/H now and keep that cash in your pocket.
Action Plan:
- Check your projected FD interest for this year.
- If you are a Senior Citizen, rejoice! Your limit is now ₹1 Lakh.
- If you are a student/homemaker earning >₹50k interest, submit Form 15G via NetBanking immediately.
Helpful Resources:
Income Tax Dept: Form 15G Rules
SBI Guide: How to submit Form 15G/H Online
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