To prevent TDS on FD under new tax regime can senior citizens with income up to Rs 12 lakh file Form 15H?
Form 15H is a boon for those senior citizens who have limited income but expect to earn more than Rs 1 lakh as interest from fixed deposit as this form may help them avoid the deduction of TDS under any given tax regime. However, how exactly one decides if he or she is eligible for filing form 15H? Is it the final tax liability or basic exemption limit?#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
#Pahalgam Terrorist Attack
The groundwork before India mounts a strike at Pakistan
India considers closing airspace to Pakistani carriers amid rising tensions
Cold Start: India's answer to Pakistan's nuclear threats
If it is basic exemption limit then a senior citizen may not be able file form 15H under the old tax regime if his expected net taxable income is above Rs 3 lakh. Similarly, under the new tax regime the basic exemption limit is 4 lakh so a senior with income above Rs 4 lakh may not be able to file form 15H if this is taken as eligibility to file the form.
For instance, if a senior citizen’s income is Rs 11 lakh then, it's not subject to income tax due to Section 87A tax rebate under the new tax regime for FY 2025-26. For FY 2025-26, the Section 87A tax rebate is available for income levels up to Rs 12 lakh under the new tax regime. So, he or she will have nil tax liability after 87 a rebate.
Despite the fact that no income tax is levied on such an income level (below Rs 12 lakh), banks and other financial institutions will still deduct TDS. This is because the law mandated them to deduct TDS once the interest/income amount crossed a particular threshold which Rs 1 lakh for senior citizens. This happens because banks are not aware about tax liability and deduct TDS whenever the annual interest amount crosses Rs 1 lakh. So, can such a senior citizen file form 15H to avoid TDS on fixed deposits?
The answer is yes. In this situation to prevent TDS deductionyou have nil tax liability you can submit Form 15H to prevent TDS deduction as this form informs the bank that depositor expects to have nil tax liability and therefore there is no need to deduct TDS.
a:hover{text-decoration:none;} .liveEventMain_widget{margin-top:15px;padding-top:24px;border-top:2px solid #000;position:relative;font-family:Montserrat;} .liveEvent_slider{position:relative;overflow:hidden;} .liveEvent_slider ul{white-space:nowrap;list-style:none;margin-top:12px;} .liveEvent_slider ul.sliderContainer{margin-bottom:30px;} .liveEvent_slider ul li{white-space:normal;width:282px;vertical-align:top;display:inline-block;margin-right:12px;border-radius:12px;box-shadow: 0px 4px 12px 0px #2407461F;background-color:#fff;overflow: hidden;} .images_wrap{position:relative;} .images_wrap .cover_img{object-fit:cover;object-position:center;border-top-left-radius:4px;border-top-right-radius:4px;} .images_wrap .author_img{position:absolute;left:10px;top:13px;border-radius:10px;} .images_wrap::before{background-image: linear-gradient(180deg, rgba(11, 11, 46, 0) 20.31%, rgba(11, 11, 46, .6) 61.46%, #0b0b2e);content: "";height: 100%;left: 0;position: absolute;right: 0;width: 100%;} .liveEventMain_widget .details{padding:12px;} .liveEventMain_widget .category{font-size:12px;line-height:14px;font-weight:700;color:#6a11b0;margin-bottom:8px;} .liveEventMain_widget .course_name{font-size:16px;line-height:20px;font-family:Faustina;-webkit-line-clamp:2;overflow:hidden;height:40px;display:-webkit-box;-webkit-box-orient:vertical;font-weight:600;color:#000;} .liveEventMain_widget .details .author_name{font-size:13px;line-height:16px;color:#333;font-weight:400;margin-top:4px;-webkit-line-clamp:2;overflow:hidden;height:32px;display:-webkit-box;-webkit-box-orient:vertical;} .liveEventMain_widget .view{border: 1.5px solid #D51131; display: block; padding: 8px 0; text-align: center; border-radius: 4px; font-size: 14px; line-height: 16px; color: #D51131; margin-top: 12px; width: 100%; font-family: Montserrat; font-weight: 600; cursor: pointer;} .liveEventMain_widget .view span{display: inline-block; width: 6px; height: 6px; border-top: 1.5px solid #ed193b; border-left: 1.5px solid #ed193b; transform: rotate(90deg); position: relative; left: 5px; top: -2px;} .liveEventMain_widget .view span::after{content: ''; display: inline-block; width: 11px; border-top: 1.5px solid #ed193b; transform: rotate(45deg); position: absolute; top: 3px; left: -2px;} .liveEventMain_widget .arrow_btn{width: 26px; height: 25px; position: absolute; z-index: 11; background-size: 312px; cursor: pointer;} .liveEventMain_widget .nextprev-btn{display:inline-block;width: 100%; position: absolute; top: 59%;} .liveEventMain_widget .prev-btn{background-position: -212px -2px;left: -12px;} .liveEventMain_widget .next-btn{background-position: -241px -2px; right: -3px;left:unset;} .liveEventMain_widget .arrow_btn.disable{opacity:0.5;} .liveEventMain_widget .ts-dots{display:inline-block;position:absolute;top:34px;right:10px;} .liveEventMain_widget .ts-dots ul{display:inline-block;} .liveEventMain_widget .ts-dots li{width:7px;height:7px;border-radius:50%;background-color:#cdcdcd;margin:0 2px;display:inline-block;} .liveEventMain_widget .ts-dots li span{display:none;} .liveEventMain_widget .ts-dots li.active{background-color:#ed193b;} .liveEventMain_widget .topContain { display: flex; align-items: center; gap: 6px; } .liveEventMain_widget .topContain .imgBox { max-width: 40px; } .liveEventMain_widget .topContain .logoTitle { font-family: "Montserrat", "Verdana"; font-weight: 700; font-size: 20px; line-height: 100%; } .liveEventMain_widget .topContain .logoSubTitle{ position: relative; font-size: 18px; font-weight: 500; line-height: 1.2; color: #747474; margin-left: 24px; } .liveEventMain_widget .topContain .logoSubTitle:before{ content:''; position: absolute; left: -13px; top: 0; width: 1px; height: 100%; background-color: #838383; } .liveEventMain_widget .liveEvent_slider .liveEventCardContainer{ } .liveEventMain_widget .liveEvent_slider .liveEventCardContainer .liveEventCard{ display: flex; } .liveEventMain_widget .liveEvent_slider .liveEventCardContainer .liveEventCoverImg{ }
Live Events
Pallav Pradyumn Narang, Partner, CNK, says: “The key condition is that the tax liability on the total income should be nil after considering deductions and rebates. It is not solely based on the basic exemption limit or post-Section 87A rebate thresholds. Instead, if after all deductions (like under Chapter VI-A) and rebates, the tax payable is zero, Form 15H can be submitted.”
Hence if you are a senior citizen whose income is below the taxable threshold (Rs 12 lakh-new tax regime, Rs 5 lakh-old tax regime), then you may file Form 15H and prevent TDS from being deducted by banks from FDs, etc.
Read below to know the various nuances of Form 15H and how using it can help you in better understanding of tax management.
What is Form 15H?
According to chartered accountant (Dr.) Suresh Surana, Form 15H is a self-declaration form that senior citizen (60 years & above) can submit to avoid TDS on income, provided their total net tax liability is zero. Do note that the TDS deducted by banks can very well be claimed at the time of ITR filing, so it's not like any extra tax, but it's like an additional tax compliance process to follow.How does the eligibility criteria for filing Form 15H work?
Surana explains that Form 15H applies based on the final tax liability after considering exemptions and rebates.New tax regime: Under the new tax regime, the basic exemption limit is Rs 4 lakh, but with the enhanced Section 87A rebate, individuals with total income up to Rs 12 lakh pay no income tax, making them eligible to submit Form 15H for FY 2025-26.
Old tax regime: In the old tax regime, the exemption limit is Rs 3 lakh (enhanced to Rs 5 lakh for taxpayers aged 80 years or more), and the 87A rebate applies for income up to Rs 5 lakh, allowing Form 15H submission for FY 2025-26, if the total taxable income does not exceed this threshold.
Rashi Khanna, Associate Partner, DMD Advocates says: "An interesting question that arises for consideration is whether a person whose income exceeds the basic exemption limit is eligible to file Form 15H, the answer is yes because for the purposes of Form 15H, the tax liability of the assessee needs to be considered and not their income per se. Therefore, Form 15H can be filed even in scenarios where the income exceeds the basic exemption limit provided the tax liability is NIL. The CBDT vide Notification 41/2019 had clarified that the tax on total income for the purposes of Form 15H will be computed after taking into consideration, the 87A tax rebate. The senior citizen should ensure that declaration is filed at the beginning of the financial year. Also, in case there is a change in the net tax liability during the year then the payer should be suitably intimated, and the form should be withdrawn."
Can Form 15H be submitted in the new tax regime in FY 2025-26 if income is up to Rs 4 lakh?
For FY 2025-26, under the new tax regime, the basic exemption limit is Rs 4 lakh, this means if you are earning up to Rs 4 lakh you don’t need to pay income tax.
Ritika Nayyar, Partner, Singhania & Co. says Form 15H can be submitted irrespective of the tax regime chosen or basic exemption limit.
“Submission of Form 15H is not regime based, or basic exemption limit based. Eligibility requires being a resident and having income below this limit, regardless of tax regime,” says Nayyar.
If a senior citizen has a higher income than Rs 3 lakh under the old tax regime can he still file Form 15H?
Surana says yes, a senior citizen can file Form 15H if their total tax liability is zero after considering all eligible deductions despite income being above Rs 3 lakh. “Although the basic exemption limit for senior citizens under the old tax regime is Rs 3 lakh, if deductions (such as under Section 80C, 80D, etc.) bring their total taxable income below this threshold, they can submit Form 15H to avoid TDS. However, if any tax is still payable after deductions, Form 15H cannot be filed, and TDS may apply,” says Surana.
What if a senior citizen submitted Form 15H but in the middle of the year the total income crossed into taxable territory?
Usually Form 15H is filed during the start of the year so as to avoid any unnecessary TDS deduction. Hence in the event where a senior citizen filed Form 15H at the start of the year but then due to any extraordinary income, his total income becomes more than Rs 12 lakh then at once the senior citizen should inform the bank where Form 15H was submitted.Surana says in this situation where a senior citizen submits Form 15H at the beginning of the financial year but later, due to extraordinary income, their total income exceeds the basic exemption limit, they should take the following steps:
Inform the Bank or Deductor – The individual must immediately notify the bank or financial institution where Form 15H was submitted. This ensures that TDS (Tax Deducted at Source) is deducted appropriately on interest or other eligible incomes.Pay Advance Tax, if Required – If the total tax liability exceeds Rs. 10,000 (after considering deductions and rebates), the senior citizens should pay advance tax to avoid interest penalties under Sections 234B and 234C of the Income Tax Act.File Income Tax Return (ITR) correctly – While filing the Income Tax Return (ITR), the senior citizen should accurately report all sources of income, including the extraordinary income, and pay any pending tax dues before the filing deadline.“If the bank has not deducted TDS due to the earlier Form 15H submission, the taxpayer should self-assess their tax liability and clear any dues before filing the ITR,” says Surana.
What does the term total income mean in the context of Form 15H?
Narang says ‘total income’ includes all taxable income, such as:Interest from Fixed Deposits (FDs)PensionRental incomeCapital gainsOther sources of income“There is no exclusion of specific incomes unless explicitly exempt under the Act (like agricultural income under Section 10(1)). Therefore, for calculating eligibility for Form 15H, income from FDs and other taxable sources must be included,” says Narang.
Aditya Chopra, Managing Partner The Victoriam Legalis agrees with Narang and adds: “When the financial institution credits the interest on the fixed deposit, the TDS amount is deducted automatically. However, according to Chapter III of the Income Tax Act, 1961 certain incomes are excluded from being part of the Total Income calculation. The scope of such incomes that are not to be included under Total Income has been revised as per the New Tax Regime. Such incomes are also called ‘Exempt’ Income.”
Does a senior citizen who filed Form 15H need to file ITR?
According to Surana, a senior citizen who has submitted Form 15H is not automatically exempt from filing an Income Tax Return (ITR). The need to file an ITR depends on total taxable income after deductions and exemptions. For example: you need to file an ITR to claim Section 87A tax rebate as it is not automatically given on all incomes.So in a nutshell, senior citizens who have filed Form 15H need to file ITR if their income is more than Rs 4 lakh but up to Rs 12 lakh under the new tax regime. In the old tax regime, it was more than Rs 2.5 lakh but up to Rs 5 lakh for FY 2025-26.
If the income is more than Rs 12 lakh in the new tax regime and more than Rs 5 lakh in old tax regime, ITR needs to be filed for FY 2025-26. The ITR filing deadline for FY 2025-26 is July 31, 2026.
These senior citizens can file Form 15H and not file any ITR
Under Section 194P of the IT Act, senior citizens aged 75 years and above are exempt from filing an ITR if their total income consists solely of pension income and interest income from a specified bank. Surana explains that the benefit of exemption from return filing can be availed by the specified senior citizen on satisfaction of the following conditions as provided in Section 194P:Senior citizen must be “Resident in India” as per Income Tax Act, 1961He must be of the age of 75 years or more at any time during the previous year;He has income only of the nature of pension and interest received or receivable from any account maintained by him in the same specified bank in which he is receiving his pension income; andHe has furnished a declaration to the specified bank. “However, Senior citizens may be required to file a return of income to benefit from provisions such as foreign visa processing requirements and the carry forward of eligible losses,” says Surana.
#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
This story originally appeared on: India Times - Author:Faqs of Insurances
