You can submit Form 15G/H even if your Gross Interest Income exceeds your Tax-Exempt Slab

Neeta chhatre | Last updated: 07 July 2021

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Many banks incorrectly reject Form 15G/H when gross interest income surpasses the tax-exempt threshold, often due to a misunderstanding of 'total income'. The Income Tax Act defines 'total income' after deductions, not just gross receipts. This article clarifies that Form 15G/H declarations are based on estimated 'total income' as per the Act, not gross income, and explains how deductions and the Section 87A rebate can result in a nil tax liability even with higher gross interest.

You can submit Form 15G/H even if your gross interest income exceeds your tax-exempt slab Many banks interpret the term total income concerning declaration in 15G/H, as any non-professional would and due to lack of proper understanding, reject the order in Form 15G or 15H. Some banks link 15G/

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FAQ :

Yes, you can still submit Form 15G/H. The forms are based on your estimated 'total income' as defined by the Income Tax Act, which is calculated after eligible deductions, not just your gross interest income.

Banks may reject Form 15G/H due to a misunderstanding of the term 'total income', often confusing it with gross interest income. Some banks also link these forms to KYC profiling, which is inappropriate.

'Gross interest income' is the total interest earned. 'Total income' is your income after claiming deductions under Chapter VIA (like 80C, 80D, 80TTB) and other applicable deductions, as per the Income Tax Act.

If your total income, after deductions and considering the Section 87A rebate (for incomes up to Rs. 5 lakh), results in a nil tax liability, you are eligible to submit Form 15G/H, even if your gross interest income exceeds the basic exemption limit.

Making a false statement on Form 15G/H can lead to prosecution under Section 277 of the Income-tax Act, with potential penalties including rigorous imprisonment and fines, depending on the tax amount sought to be evaded.