Investing in bonds is one of the most stable ways to earn interest income. But something that often surprises new investors is TDS (Tax Deducted at Source) on interest. Even if your total income is below taxable limits, TDS may still get deducted unless you submit the right declaration.

That’s where Form 15G and Form 15H become your best tax-saving companions.

Let’s break it down in clear, everyday language.

Why is TDS deducted on bond interest?

Whenever a company or institution pays interest on bonds, they check whether the interest crosses the TDS threshold. If yes, they may deduct tax upfront before you receive the money.

This can become annoying because:

• Your income may not be taxable at all
• You still end up losing part of your interest
• Later, you have to file a return just to claim a refund

Thankfully, there’s a very simple way to avoid unnecessary tax deduction.

What is Form 15G?

Form 15G is a self-declaration form for individuals (below 60 years of age) whose total taxable income is NIL.
By submitting this form to the bond issuer or broker, you are informing them:

“I should not be charged TDS because my income does not cross the taxable limit.”

Who Can Submit Form 15G?

✔ Individuals below 60 years
✔ Total interest + other income must be below basic exemption limit
✔ The tax payable for the year should be zero

Example:
If a student or a low-income investor earns ₹1.5 lakh including bond interest — they can submit Form 15G and no TDS will be deducted.

What is Form 15H?

Form 15H is specifically for senior citizens (60 years or above).
Even if their interest income is high, as long as the overall tax liability is zero, they can submit this form and stop TDS deduction.

Senior citizens usually benefit the most because they often rely on bond interest for regular income.

Where and When should you submit these forms?

When to Submit	Why it Matters
At the start of every financial year	Ensures no TDS deduction during the year
While investing in bonds	To prevent TDS from first payout
If your income situation changes	You can update the declaration anytime

Forms must be submitted to:

• Your bond issuer (Companies, NBFCs)
• Depository Participants / Brokers
• Banks (if investing in bank-issued bonds)

Important: Don’t misuse the forms

Form 15G/15H is only for those whose taxable income will be zero.
False declarations can lead to penalty and repayment of deducted tax with interest.

So always calculate your income honestly before submitting.

Quick Comparison Table

Feature	Form 15G	Form 15H
Applicable To	Individuals & HUF below 60 years	Senior citizens (60+)
Tax liability	Should be nil	Should be nil
Income limit	Below basic exemption	No fixed limit, but zero tax condition
Purpose	Avoid TDS on interest	Avoid TDS on interest

How This Helps Bond Investors :-

✔ Full interest credited — no waiting for refunds
✔ Bigger cash flow for reinvestment
✔ Cleaner financial planning
✔ Hassle-free paperwork at tax filing

For conservative investors, every rupee matters — and these forms ensure you keep what you rightfully earn.

Final Thought

Tax rules can be confusing, but smart investors don’t pay what they don’t owe.
A simple declaration at the right time keeps your bond income tax-efficient and your money working harder for you.

If you regularly earn interest but your income is below the tax limit —
don’t forget Form 15G or Form 15H next April.

FAQs on Saving Tax through Form 15G & 15H

Q1. Do I need to submit Form 15G/15H every year?
Yes. The declaration is valid only for the financial year in which you submit it.

Q2. Can NRIs use Form 15G or Form 15H?
No. These forms are strictly for resident Indians.

Q3. What happens if I don’t submit the form?
TDS will be deducted automatically, and you’ll need to claim a refund later.

Q4. Can I submit Form 15H even if my interest income is high?
Yes — as long as your total tax liability is zero after deductions.

Q5. Do I need PAN to submit these forms?
Yes. PAN is mandatory for Form 15G/15H.