With the revised income tax slabs and new regime thresholds applicable for FY 2025–26, Forms 15G and 15H have been updated to align with India’s evolving tax framework. These changes aim to simplify compliance, enhance digitization, and ensure that eligible individuals and HUFs can avoid unnecessary TDS on interest and dividend income—provided their total taxable income remains within prescribed exemption limits.
Here’s a comprehensive, banking-focused breakdown of what has changed and what it means for customers and financial institutions.
Understanding Forms 15G and 15H
Forms 15G and 15H are self-declarations submitted to banks and other payers to request non-deduction of tax at source (TDS) on specified incomes such as:
- Fixed deposit (FD) interest
- Recurring deposit (RD) interest
- Dividend income
- EPF withdrawals (subject to conditions)
These forms can only be submitted when the individual’s total tax liability for the financial year is nil.
Eligibility Criteria for FY 2025–26
Form 15G
Applicable to:
- Individuals below 60 years of age
- Hindu Undivided Families (HUFs)
Conditions:
- Total income must not exceed the basic exemption limit.
- Under the new tax regime, this limit is ₹4 lakh (revised upward from ₹3 lakh).
- The tax liability must be zero.
Form 15H
Applicable to:
- Senior citizens aged 60 years or above.
Conditions:
- Tax liability must be nil after considering rebate under Section 87A.
- In many cases under the new regime, effective tax relief may extend to incomes up to approximately ₹12 lakh, subject to rebate eligibility.
Both forms now require accurate declaration of estimated income for FY 2025–26. Incorrect estimation or false declarations may attract penalties.
Additionally, banks and payers must retain these declarations for seven years for Income Tax Department audit purposes.
Major Updates Introduced for FY 2025–26
1. Centralized Filing via Depositories
A significant reform introduced in Budget 2026 allows centralized submission through depositories such as:
- National Securities Depository Limited
- Central Depository Services Limited
Investors can now submit the form once through these platforms, and the information will be shared across banks, companies, and mutual funds—eliminating multiple submissions.
This is particularly beneficial for dividend investors following the abolition of Dividend Distribution Tax (DDT), where TDS now applies at the investor level.
2. Mandatory UIN-Based Digitized Verification
All electronically submitted forms will now be tagged with a Unique Identification Number (UIN) through the income tax portal.
This aligns with the government’s Faceless Assessment framework and enhances traceability and compliance monitoring.
A new compliance requirement includes:
- Submission of ITR acknowledgments for the previous two financial years.
- Enhanced digital cross-verification via TRACES.
3. Revised TDS Thresholds (Effective April 1, 2025)
| Category | Interest TDS Threshold |
| Individuals below 60 | ₹50,000 |
| Senior Citizens | ₹1,00,000 |
TDS will be deducted only if interest income exceeds these limits and no valid Form 15G/15H is submitted.
4. Annual Validity
Both Forms 15G and 15H remain valid for one financial year only. Fresh submission is mandatory each year.
Submission Process: Step-by-Step
For Bank Customers
- Download the form from:
- Income tax e-filing portal
- Bank website
- Fill in:
- PAN details
- Address
- Estimated income
- Previous ITR details
- Submit:
- Physically at the branch, or
- Electronically (where available)
Banks verify eligibility through internal systems and TRACES before processing.
For Investors Using Depositories
- Log in to NSDL/CDSL portal.
- Upload the declaration once for multi-asset coverage.
- Track status via UIN.
Failure to submit a valid form may result in 10% TDS deduction at source, even if the individual ultimately has zero tax liability.
Banking Sector Implications
The FY 2025–26 framework has notable operational implications for banks:
- Mandatory integration of UIN validation systems.
- Strengthened coordination between RBI-regulated entities and the Income Tax Department.
- Reduced incidence of erroneous TDS and refund claims.
- Faster reconciliation in Form 26AS.
For customers, proactive filing is essential. Non-submission—even when eligible—will result in TDS deduction, leading to avoidable refund delays.
Quick Comparison Snapshot
| Feature | Form 15G | Form 15H |
| Eligible Category | Individuals < 60 years / HUF | Senior Citizens (60+) |
| Income Condition | Total income below ₹4 lakh | Nil tax liability (often up to ₹12 lakh post-rebate) |
| Submission Mode | Bank / Depository / E-portal | Same |
| New Compliance | Last 2 ITRs + UIN | Same |
| Validity | One Financial Year | One Financial Year |
| TDS Threshold | ₹50,000 interest | ₹1,00,000 interest |
Strategic Takeaway for Depositors and Investors
The modernization of Forms 15G and 15H reflects the government’s push toward centralized, technology-driven tax compliance. While the process is now more streamlined, it is also more closely monitored.
For banking customers, the message is clear:
- Assess your estimated income early.
- Submit declarations before interest credit dates.
- Ensure accuracy to avoid penalties and scrutiny.
For banks, digital integration and real-time verification will be key to maintaining compliance and enhancing customer experience.
As tax systems evolve, informed financial planning remains the strongest safeguard against unnecessary deductions and liquidity disruptions.
