Banks will deduct TDS (Tax Deducted at Source) if your yearly interest income exceeds Rs. 40,000 (Rs. 50,000 for senior citizens). However, if your total income does not fall in the taxable bracket then you can fill a form and submit it to the bank to avoid TDS deduction.
If you are a senior citizen, you will have to fill Form 15H and non-seniors will have to fill Form 15G to get TDS exemption. The form that applies to you is to be filled every year and it is recommended that you submit it at the onset of the financial year to ensure that the banks do not deduct the TDS.
Benefits of Form 15G/15H
Useful for senior citizens
Senior citizens might tend to invest in multiple instruments like SCSS i.e. Senior Citizen Saving Scheme, fixed deposits, Post Office FDs, etc. Interest income of up to Rs. 50000 is exempted from TDS deduction if your age is above 60.
If your interest income exceeds this limit but your total income falls below the taxable limit then you can submit Form 15H form to bank or post offices to claim TDS exemption.
For early withdrawal of EPF
TDS shall be deducted if you have withdrawn Rs. 50,000 or more from EPF account before completion of 5 years of continuous service. However, if your total taxable income is zero, you can avoid TDS dediuction by submitting your PAN details along with Form 15G/15H.
Exemption from TDS on rent
TDS is applicable if your rent earnings exceed Rs. 2.4 lakhs. However, if your total taxable income is zero then you can fill and submit Form 15G/15H to get an exemption from TDS payment.
Thus, you have seen that Form 15H/15G can be used to safeguard your interest earnings by avoiding TDS. However, you will also need to find an instrument that offers stable and high returns for securing your future.
Investing in Bajaj Finance FD is one way to safeguard your earnings as it has received high ratings by credit rating institutions like ICRA and CRISIL for being a secure and stable investment option. Moreover, it also multiplies your deposited amount quickly as it grows at an FD interest rate of up to 6.85%. Other benefits that you become eligible on depositing your savings in this instrument are given below:
- Loan against FD
During tough financial situations, you can receive a loan of up to 75% of your FD value if you have invested in Bajaj Finance FD. Therefore, you have one more option rather than withdrawing your deposits and losing some interest as penalty charges.
- Higher FD rate to senior citizens
Senior citizens can earn more now as Bajaj Finance FD is offering an extra interest rate of 0.25% to seniors. If you are not a senior citizen then also you can earn 0.10% additional interest rate by investing in this FD through an online FD form.
To explore the interest rates and tenor range options across all customer categories, you can check the online fixed deposit rates calculator.
- Multiple investment options
The option of receiving accumulated interest periodically via monthly, quarterly, six-monthly, or yearly interest payouts ensures that you take care of your regular expenses without any issues. You may choose to invest in a cumulative FD to compound your interest earnings.
This is because the interest is paid directly at maturity and therefore, the interest that you earn every quarter gets added to the principal during the next interest calculation cycle. It compounds your interest earnings and you get much better returns.
You may also invest in more than one FD at once and choose a flexible tenor ranging from 12 to 60 months by using the multi-deposit feature from Bajaj Finance. These features and options make it a viable investment avenue for investing your money especially in today’s context where the FD rates have dropped across all segments.
Utilizing all the available means to ensure better interest earnings is a must in today’s times. One way to earn more is to avoid TDS deduction and this can be done by filling and submitting Form 15G/15H in case your taxable income is nil. It means that you will get a TDS exemption even if your interest earnings are above the threshold limit. This form can also be used to avoid TDS on rent, early EPF withdrawal, and many other instruments like SCSS and other post office deposits. To earn better, you also need to invest in an instrument that offers considerable returns.
One such investment option is Bajaj Finance FD that enables you to earn substantial interest and provides flexible investment options and convenient tools like an FD calculator. It is a safe option as it has received the best ratings for safeguarding the deposits of investors by credit rating organizations like ICRA and CRISIL.
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at Highlight Story.