Keep More Money: Use Form 15G & Form 15H to Save Tax on Your FD Earnings

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Fixed Deposits (FDs) are a favored investment avenue among Indian investors due to their guaranteed returns. Not only do FDs offer assured returns, but they also provide tax benefits under certain conditions. Understanding the intricacies of tax-saving options and TDS deductions on FDs can significantly impact your investment strategy. Let’s delve into the details:

Tax Benefits on FDs:

  1. Section 80C Deductions: Investors can claim tax exemptions on FD investments of up to Rs 1.50 lakh under Section 80C of the Income Tax Act. However, this benefit is applicable only to FDs with tenures of five years and above.
  2. Tax-Free Income: The interest earned on FDs is tax-free up to a certain limit, as per income tax rules. Beyond this limit, TDS (Tax Deducted at Source) is applicable.

TDS on FD Earnings:

  1. TDS Threshold: According to income tax rules, TDS is deducted if the annual interest earned on FDs exceeds Rs 40,000 for regular individuals and Rs 50,000 for senior citizens.
  2. Incorporation in Total Income: The deducted TDS amount is added to the individual’s total income and taxed as per the applicable slab rates.

Form 15G and Form 15H: Saving Taxes on FDs

  1. Form 15G: Individuals below 60 years of age, including members of Hindu Undivided Families (HUFs), can submit Form 15G to declare that their income does not fall under the taxable bracket. This form prevents the bank from deducting TDS on FD interest earnings.
  2. Form 15H: Designed for senior citizens aged 60 years and above, Form 15H serves a similar purpose as Form 15G. It allows senior citizens with zero taxable income to avoid TDS deductions on their FD interest earnings. However, submission of Form 15H is mandatory only if the taxable income is nil.

Submission Process:

  1. Bank Submission: Both Form 15G and Form 15H need to be submitted to the bank where the FD is held.
  2. Pre-Interest Payment Submission: Form 15H must be submitted before the first interest payment is made. Although it’s not mandatory, doing so ensures that TDS deductions are avoided from the outset.

Claiming TDS Refund:

If an individual fails to submit Form 15G or Form 15H and TDS is deducted, they can claim a refund from the Income Tax Department during the assessment year. The refunded amount will be adjusted against the TDS deduction.


Understanding the tax implications and utilizing the provisions of Form 15G and Form 15H can optimize your returns on FD investments while minimizing tax liabilities. By staying informed and proactively managing your investments, you can make the most of your fixed deposit portfolio.

Invest wisely, minimize taxes, and maximize returns!

(Disclaimer: This article provides general information and should not be construed as tax advice. It’s recommended to consult with a tax professional for personalized guidance.)

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Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

Disclaimer:- The opinions presented are exclusively those of the author and CA Guruji Classes. The material in this piece is intended purely for informational purposes and for individual, non-commercial consumption. It does not constitute expert guidance or an endorsement by any organization. The author, the organization, and its associates are not liable for any form of loss or harm resulting from the information in this article, nor for any decisions made based on it. Furthermore, no segment of this article or newsletter should be employed for any intention unless granted in written form, and we maintain the legal right to address any unauthorized utilization of our article or newsletter.

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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