TDS waiver allows individuals with income below taxable limits to avoid tax deduction at source on interest earnings from fixed deposits, recurring deposits, and other investments. Banks and financial institutions deduct TDS when interest exceeds Rs 40,000 annually (Rs 50,000 for senior citizens). Understanding what TDS waiver is and submitting the right forms prevents unnecessary deductions and saves the hassle of claiming refunds. This guide covers eligibility, Form 15G/15H requirements, and step-by-step submission process. 

TDS stands for Tax Deducted at Source. It is a mechanism where the payer (bank, employer, company) deducts tax before paying income to the recipient. For interest income: 

• Banks deduct TDS at 10% on interest above the threshold 
• Without PAN, deduction increases to 20% 
• Deducted amount is deposited with the government 
• Recipient claims credit when filing income tax return 

TDS ensures tax collection at the point of income generation rather than relying solely on self-declaration. 

When is a TDS Waiver Applicable? 

A TDS waiver becomes applicable when: 

• Total income falls below the basic exemption limit (Rs 2.5 lakhs for individuals, Rs 3 lakhs for senior citizens) 
• Interest income combined with other income does not create tax liability 
• Individual is not liable to pay any income tax for the financial year 

The waiver does not mean tax exemption. It means no deduction at source because the final tax liability is nil anyway. The income must still be declared in ITR. 

Who Should Submit Form 15G? 

Form 15G is a self-declaration for: 

• Indian residents below 60 years of age 
• Individuals with total income below the basic exemption limit 
• HUFs (Hindu Undivided Families) with no tax liability 
• Trusts with tax-exempt income 

Eligibility conditions: 

• Tax calculated on estimated total income is nil 
• Person is a resident of India (not NRI) 
• Interest income does not exceed the basic exemption limit alone 

Who Should Submit Form 15H? 

Form 15H is exclusively for senior citizens: 

• Age 60 years or above at any time during the financial year 
• Tax liability on total income is nil 
• Resident Indian only 

Key difference from 15G: 

• No restriction on interest income amount 
• Only condition is nil final tax liability 
• Simpler eligibility criteria 

Senior citizens with income above Rs 3 lakhs but with deductions (80C, 80D, etc.) reducing tax to nil can still submit 15H. 

Key Differences Between Form 15G and 15H

Income Thresholds 

What is TDS waiver eligibility in FY 2024–25: 

Under new tax regime: 

• All individuals: Rs 3,00,000 basic exemption 
• Standard deduction: Rs 50,000 (if applicable) 
• Rebate under 87A: up to Rs 7,00,000 income 

Calculate total income from all sources before determining eligibility. 

Age Requirements 

Age determination: 

• Form 15G: must be below 60 years on 1st April of the financial year 
• Form 15H: must be 60 years or above at any point during the financial year 

Someone turning 60 on 31st March of the financial year qualifies for Form 15H for that entire year. 

Other Important Conditions 

Additional eligibility factors: 

• Must be an Indian resident (NRIs cannot submit 15G/15H) 
• PAN is mandatory for both forms 
• Declaration must be made separately to each deductor 
• Fresh declaration required each financial year 
• Cannot submit for income already taxed 

False declaration attracts penalty and prosecution under the Income Tax Act. 

Step-by-Step Online Submission Process 

Most banks now accept online Form 15G/15H: 

Step 1: Log in to your bank’s net banking or mobile app 

Step 2: Navigate to “Service Requests” or “Tax Centre” section 

Step 3: Find “Submit Form 15G/15H” option 

Step 4: Select account type (FD, RD, savings interest) 

Step 5: Enter financial year for which declaration is made 

Step 6: Fill estimated income details: total estimated income, estimated interest from this bank, previous 15G/15H submissions in the same year 

Step 7: Verify PAN and personal details 

Step 8: Accept declaration and submit 

Step 9: Download acknowledgement for records 

Documents Required

For online submission: 

• PAN card (already linked in most cases) 
• Estimated income calculation 
• Previous assessment orders (if any) 

For offline submission: 

• Duly filled Form 15G or 15H (2 copies) 
• PAN card photocopy 
• Age proof (for Form 15H) 
• Identity proof 

No supporting documents are technically required but keep income proof for your records. 

Where and When to Submit the Forms

Submission timeline: 

When: Beginning of the financial year (April) is ideal 

Where: Each bank/institution where you have deposits 

Frequency: Fresh form each financial year 

Deadline: Before interest credit date to avoid TDS 

If FD interest credits quarterly, submit the form before the first quarter ends. Late submission means TDS deducted for earlier periods cannot be reversed (claim refund via ITR instead). 

How TDS is Calculated on FD Interest 

TDS calculation example: 

• FD amount: Rs 10,00,000 
• Interest rate: 7% 
• Annual interest: Rs 70,000 
• TDS threshold: Rs 40,000 
• Taxable interest: Rs 70,000 
• TDS at 10%: Rs 7,000 

Without TDS waiver through Form 15G/15H, Rs 7,000 gets deducted before crediting interest. 

TDS Rates and Thresholds for General and Senior Citizens 

Current TDS provisions: 

Section 194A governs TDS on interest from banks, post offices, and cooperative societies. 

Impact of Not Submitting Form 15G/15H 

Without valid form submission: 

• TDS deducted at the applicable rate 
• Refund possible only after filing ITR 
• Refund takes 3–6 months after ITR processing 
• Opportunity cost of blocked funds 
• Additional effort for refund claim 

Submit forms proactively to avoid these complications. 

TDS Deduction Consequences 

If you miss submission: 

• Bank deducts TDS as per normal provisions 
• Amount reflects in Form 26AS and AIS 
• You must file ITR even if otherwise not required 
• Claim TDS credit in return 
• Request refund of excess deduction 

TDS already deducted cannot be reversed by the bank. 

Claiming Refunds via Income Tax Return 

Refund process: 

Step 1: File ITR before the due date 

Step 2: Declare all income sources including interest 

Step 3: Calculate total tax liability 

Step 4: Claim TDS credit from Form 26AS 

Step 5: If TDS exceeds liability, a refund is generated 

Step 6: Refund credits to bank account (typically 20–60 days after ITR processing) 

Pre-validate bank account on the income tax portal for faster refund processing.