Forms 15 G And 15H: TDS Exemption On Bank Interest, EPF Withdrawals

Tax deducted at source (TDS) is an important tax regulation under the Income-tax Act, 1961. The income tax department sets TDS limitations on interest income and withdrawals, and exceeding the limit requires a financial institution to deduct TDS and report it to the income tax department. 
 

Form 15G And 15H 

Forms 15G and 15H are used to request TDS exemption for certain investments. The sole distinction is that 15G is for those under 60 years of age, while 15H is for people over 60. 
 

These forms are valid for one year. Investors must fill them out once a year if their income does not exceed the taxable limit. If it exceeds the limit and form 15G/H is submitted, they must calculate the income not deducted from TDS and pay the appropriate tax before submitting an income tax return. 
 

Therefore, if TDS is deducted, they must file forms 15G or 15H, such as on bank interest over Rs 40,000 for the general public and Rs 50,000 for senior citizens in a year, EPF withdrawals exceeding Rs 50,000, rental income, dividend income, and so on. They can avoid TDS by completing these forms. 

TDS Deduction On EPF And Exclusions 

 
1] Tax is deducted at source from an EPF account if the withdrawal amount exceeds Rs 50,000 and meets the conditions that withdrawal occurs in less than five years of service.  

2] If the withdrawal is less than Rs 50,000, then there is no TDS. 

3] Transferring EPF from one account to another and withdrawal after five years is also excluded from the purview of TDS. 

4] Termination of service for health or other causes beyond the employee’s control is also excluded. 
 

Provident Fund is one of the largest social security plans which consists of 277 million participants, thus it is critical to understand how to use this financial instrument properly for retirement planning. It specifies contributions from employees and employers and is tax-exempt for deposits.