The 12-15-20 investment formula can make you a millionaire!

If you do not want the bank to deduct TDS on your deposit, then Form 15G or 15H will come to your rescue. But this exemption is applicable with certain conditions. Your taxable income must be nil only then will you get a respite from TDS.

If your income is less than Rs 2.50 lakh then only the interest from the bank FD can be exempted from TDS. Banks deduct 10% as TDS on FD interest above Rs 40,000. If you are under 60 years of age, and your income is non-taxable then you can fill Form 15G and submit it in bank. If you are over 60 years of age, then this exemption on TDS can be availed through Form 15H and the interest amount of 50,000 is exempted.

For example, Vinita is 45 years old. Her annual income is Rs 2 lakh and she is gets an interest of Rs 70,000 from the FDs. Thus, her total income is Rs 2.70 lakh. Now, if Vinita makes a tax saving investment of Rs 45,000 under 80C, then the total income will be 2.25 lakh and she will be able to claim exemption of TDS by filling the declaration of Form 15G.

Take care of these things if you want to avoid TDS

You should fill 15G or 15H at the beginning of the financial year so that the bank does not deduct tax. If tax is deducted once and your income is below the taxable limit, then you can claim the refund only by filing income tax return.

You must have permanent account number (PAN) or else you will not get rebate. In case you don’t have a PAN,  then bank can deduct double the amount as TDS.

The forms have to be filed every year with the banks and not the income tax department.

If you have FD in more than one bank, then you have to give different declarations 15G and 15H in each bank.

These forms are available with the banks and also on the income tax website.

If you try to evade tax by filling Form 15G or 15H then you can get 3 months to 3 years in jail under Section 277 of Income Tax. And if the tax evasion is of more than Rs 1 lakh then there can be a jail term of up to seven years.