Form 15G Explained: How To Avoid TDS On Interest Income

Fixed deposits are a standard way to earn a regular income. However, when you cross a certain interest limit, you have to pay Tax Deducted at Source on that interest that you earned. Do you want to understand how to avoid that? Well, this can be done using Form 15G. 

Since the tax is deducted automatically, it is better to make arrangements beforehand. Earlier, this was done by submitting Form 15G, where eligible individuals declared that their total income was below the basic exemption limit and requested banks not to deduct TDS on interest income.

However, from April 2026 onwards, Form 15G has been replaced by Form 121, which now serves as the unified declaration for requesting non-deduction of TDS.

What Is Form 15G?

Form 15G can be defined as a self-declaration form, issued under Section 197A of the Income-tax Act, 1961. When you submit this form to a financial institution or to that bank, you declare that your total income for the financial year is below the exemption limit. 

• Purpose of the form

The main purpose of the form is to prevent or avoid unnecessary TDS deductions. Submitting this to the bank or a financial institution will tell them not to deduct any tax from the interest income. This is most beneficial for investors who have an overall low income and earn interest from deposits.

• Reference to Income Tax Department

The Income Tax Department of India had introduced the Form 15G. This acts as a formal declaration confirming your estimated income for the year and that it is below the taxable scale.

Who Can Submit Form 15G?

The Form 15G cannot be submitted by everyone. You have to meet the eligibility criteria to do so. You can hence use the form to avoid TDS imposed on interest earned.

Eligibility criteria

• You have to meet the following criteria to be eligible for Form 15G.
• You should be a resident of India or a Hindu Undivided Family.
• You must be below the age of 60 years old.
• Your total tax liability for the year must be zero.
• You should have a valid PAN to provide for Form 15G.

Income threshold conditions

Following the eligibility criteria is the income scale, which relates to your income limits. The total estimated income for the financial year should be below the basic exemption threshold. In accordance with the present tax rules, the basic exemption limit is INR 2.5 lakhs under the old tax regime. 

How To Submit Form 15G?

The process of filing the 15G form is simple. Banks provide the facility to file the 15G form online as well as offline. You need to file the 15G form at the beginning of the financial year. This way, the bank will not deduct any TDS on your interest earnings.

• Online submission

The online submission can be made through your net banking facility provided by your bank. The process is quite fast. You need to log in to your account, go to the section where you can find the tax services, and select the option for filing your 15G form.

You will be required to provide your PAN, your estimated income, and your deposits. Once you have filled in all the information, you can submit your form online. Your bank will note down all the information. Many banks, like SBI, HDFC, and ICICI, provide online facilities.

• Submission through banks

You can also submit it offline at your bank branch.

Step 1: First, download the Form 15G PDF from your bank's website or obtain it from your bank branch. Fill it accordingly.

Step 2: Next, submit your form to your bank after signing it. The bank will process your declaration accordingly.

After your bank accepts your form, it will stop deducting TDS from your eligible income earned from interest.

Situations Where Form 15G Cannot Be Used

Form 15G is useful, but it is not applicable in all situations. Some circumstances make the form invalid. Before filing the form, it is important to check that the requirements are met. If the requirements are not met, the bank will deduct the TDS.

• Income exceeding the exemption limit.

You cannot submit Form 15G if your income is more than the basic exemption limit.

For example, let’s assume that you have a total income for the year, and the total income is INR 4 lakhs. In such a case, you are required to pay tax on your income. Submission of Form 15G in such a situation is not valid. Banks will deduct TDS on your income in such cases. Penalties may also be levied on you if you submit incorrect information in the form.

Conclusion

Moreover, interest income is a common part of personal finance, and TDS is often deducted automatically on such earnings. Earlier, investors could avoid TDS on interest income by submitting Form 15G, declaring that their total income was below the taxable limit.

However, Form 15G has now been replaced by Form 121, which serves as the new unified declaration to request non-deduction of TDS, subject to eligibility.

You should still check your eligibility before submitting the form. Your total income must be below the taxable limit, and your overall tax liability should be zero. If submitted correctly, Form 121 can help you receive your full interest income without deductions and avoid the need to claim refunds later.

While fixed deposits remain widely used, many investors are also exploring diversified income-generating assets. Platforms like Grip offer access to alternative fixed-income opportunities, helping investors balance returns with predictable cash flows.

For a more diversified income, start investing with Grip Invest today!

FAQs On Form 15G

1. What is Form 15G used for?

The Form 15G is a self-declaration form that is submitted to banks or financial institutions. Through this form, you can state that your total income for the financial year is below the taxable limit. After you submit the form, you will be exempt from TDS on interest income, including fixed-deposit interest.

2. Who is eligible to submit Form 15G?

The Form 15G can be submitted for residents who are below the age of 60 and individuals who fall under the Hindu Undivided Families (HUFs). To avail the benefit, the total taxable income should be below the basic exemption limit. Also, your final tax liability should be zero.

3. Is Form 15G applicable to senior citizens?

Form 15G is not eligible for senior citizens. This form can only be used by individuals below 60. Residents above the age of 60 years can submit Form 15H. This serves a similar purpose as that of Form 15G.

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