Choosing the Wrong Tax Declaration Form Can Lead to Incorrect TDS Treatment. Here Is What Taxpayers Need to Understand

Tax deduction at source (TDS) is an important part of India’s taxation system. It allows tax to be collected at the time of payment rather than only at the end of the financial year.

Banks, companies, financial institutions, and other deductors regularly deduct TDS on payments such as:

• Interest income.
• Salary payments.
• Professional fees.
• Commission.
• Other taxable payments.

However, in certain situations, taxpayers may be eligible to request that tax should not be deducted or should be deducted at a lower rate.

For this purpose, taxpayers use specific declaration forms.

Two forms that often create confusion are:

• Form 121
• Form 15G and Form 15H

Although both relate to tax deduction situations, their purpose, eligibility, and application are different.

Understanding the difference is important because submitting the wrong form can result in:

• Incorrect TDS deduction.
• Compliance issues.
• Delay in tax refund claims.

The Income-tax Act, 2025 introduces a reorganised framework for direct tax provisions, along with updated forms and compliance processes from the applicable effective period. Taxpayers and businesses need to follow the relevant forms and procedures notified under the new framework.

For example:

A senior citizen earns interest from fixed deposits.

The person wants to avoid unnecessary TDS deduction because their total taxable income is below the taxable limit.

They need to understand whether Form 15H is applicable or whether another declaration mechanism is required.

This detailed guide explains:

• What is Form 121?
• What are Form 15G and Form 15H?
• Key differences between these forms.
• Eligibility conditions.
• Practical examples.
• Common mistakes taxpayers should avoid.

Understanding TDS Declaration Forms

TDS declaration forms are documents submitted by taxpayers to inform deductors about their tax situation.

The purpose is to ensure that:

• Correct tax is deducted.
• Eligible taxpayers are not burdened with unnecessary deductions.
• Compliance records remain accurate.

These forms are generally submitted to:

• Banks.
• Financial institutions.
• Companies.
• Other deductors.

For example:

A bank pays interest income to a customer.

Before deducting TDS, the bank considers whether the taxpayer has submitted a valid declaration for non-deduction or lower deduction.

What Is Form 15G?

Form 15G is a declaration submitted by eligible individuals to request non-deduction of TDS on certain income where their total taxable income is below the taxable limit.

It is commonly used for:

• Bank interest income.
• Fixed deposit interest.
• Recurring deposit interest.
• Certain other specified incomes.

The purpose of Form 15G is to inform the deductor that:

• The taxpayer’s total income is within the exemption limit.
• Tax liability is expected to be nil.
• TDS should not be deducted where applicable conditions are satisfied.

Who Can Submit Form 15G?

Form 15G is generally used by individuals who satisfy prescribed conditions.

Common conditions include:

• Individual taxpayer.
• Resident status as applicable.
• Age below the senior citizen threshold.
• Estimated tax liability is nil.
• Eligible income falls within prescribed limits.

For example:

A 35-year-old individual earns:

• Salary income: ₹2 lakh.
• Bank interest: ₹20,000.

If applicable conditions are satisfied and tax liability is nil, Form 15G may be considered.

What Is Form 15H?

Form 15H is a declaration form specifically meant for senior citizens.

It allows eligible senior citizens to request non-deduction of TDS on certain income sources.

The main difference from Form 15G is the age criteria.

Form 15H is generally applicable to:

• Resident senior citizens.
• Individuals who meet prescribed conditions.
• Persons whose estimated tax liability is nil.

For example:

A 70-year-old person receives interest income from fixed deposits.

If the person meets eligibility conditions and has no tax liability, Form 15H may be submitted to the bank.

Purpose of Form 15G and Form 15H

The main objective of these forms is to prevent unnecessary TDS deduction.

Without these declarations:

• Banks may deduct TDS when interest crosses specified limits.
• Taxpayers may need to claim refunds later.

For example:

A retired person has income below the taxable limit but earns bank interest.

If TDS is deducted, the person may have to wait until filing the income tax return to claim a refund.

Submitting Form 15H can help avoid such situations if eligibility conditions are fulfilled.

What Is Form 121?

Form 121 is a tax declaration form introduced under the updated tax compliance framework.

It is important to understand that different forms serve different purposes, and taxpayers should use only the form applicable to their specific transaction and eligibility criteria.

The purpose of Form 121 relates to tax declaration requirements under the updated framework and should not be confused with Form 15G or Form 15H, which are specifically associated with declarations for non-deduction of TDS in eligible cases.

The Income Tax Department has issued updated forms and guidance materials under the Income-tax Act, 2025 framework.

Taxpayers should verify:

• Applicable form requirement.
• Nature of income.
• Deductor requirements.
• Conditions prescribed under tax rules.

Difference Between Form 121 and Form 15G/15H

Why Choosing the Correct Form Matters?

Submitting the wrong declaration can create problems.

For example:

A taxpayer submits Form 15G despite not satisfying eligibility conditions.

Possible consequences include:

• Incorrect TDS treatment.
• Additional tax liability.
• Compliance questions.

Similarly, using an incorrect form instead of the prescribed declaration can delay processing.

Common Situations Where Taxpayers Need Guidance

Taxpayers often face confusion in situations such as:

• Multiple bank accounts.
• Multiple sources of interest income.
• Retirement income planning.
• Investment income.
• Tax regime selection.

For example:

A senior citizen has:

• Fixed deposit interest from three banks.
• Pension income.
• Mutual fund investments.

The person should evaluate eligibility before submitting any declaration form.

Eligibility Difference Between Form 121 and Form 15G/15H

Understanding eligibility is the most important factor before submitting any tax declaration form.

Using an incorrect form can lead to:

• Rejection of declaration.
• Incorrect TDS treatment.
• Additional compliance requirements.

While Form 15G and Form 15H are specifically associated with declarations for non-deduction of TDS on eligible income, other tax declaration forms serve different purposes under applicable tax rules.

Taxpayers should always verify the relevant form requirements according to the nature of income and applicable provisions.

Form 15G Eligibility Conditions

Form 15G is generally used by individuals who meet specific conditions.

Common eligibility conditions include:

• Individual taxpayer.
• Resident status as applicable.
• Age below the senior citizen category.
• Estimated total income within the prescribed limit.
• Estimated tax liability being nil.

For example:

A 30-year-old individual earns:

• Interest income from fixed deposits.
• Small investment income.

If the person’s total taxable income is below the taxable threshold and other conditions are satisfied, Form 15G may be submitted.

Form 15H Eligibility Conditions

Form 15H is designed specifically for senior citizens.

It is generally applicable to:

• Resident individuals above the specified senior citizen age limit.
• Taxpayers satisfying prescribed conditions.
• Individuals expecting no tax liability.

For example:

A retired person receives:

• Pension income.
• Bank interest income.

If eligible conditions are satisfied, Form 15H can be submitted to the bank to request non-deduction of TDS.

Key Difference Between Form 15G and Form 15H

When Should Taxpayers Submit Form 15G/15H?

These forms are generally submitted at the beginning of the financial year or when the income becomes applicable for TDS deduction.

Common situations include:

• Fixed deposit interest.
• Recurring deposit interest.
• Certain eligible income payments.

For example:

A person creates multiple fixed deposits with a bank.

Before interest payment crosses the applicable TDS threshold, the person submits Form 15G or 15H if eligible.

This helps the bank determine whether TDS should be deducted.

How Banks Process Form 15G and 15H?

Banks collect these declarations from customers and process them according to applicable rules.

The bank verifies:

• Customer details.
• PAN information.
• Declaration details.

The information is then considered while applying TDS provisions.

Customers should ensure:

• Correct PAN details.
• Accurate income declaration.
• Proper submission.

Incorrect information can create tax complications.

Common Mistakes While Submitting Form 15G/15H

Submitting Form Without Checking Eligibility

One of the biggest mistakes is submitting these forms without verifying conditions.

For example:

A taxpayer submits Form 15G even though their estimated tax liability is not nil.

This may result in incorrect declaration.

Forgetting Multiple Income Sources

Taxpayers often consider only one source of income.

They may ignore:

• Other bank accounts.
• Rental income.
• Investment income.

Total income should be considered before submitting the declaration.

Not Updating PAN Details

Incorrect PAN information can affect TDS processing.

Taxpayers should ensure:

• Correct PAN.
• Correct personal details.
• Updated bank records.

Submitting Forms After TDS Deduction

Many taxpayers submit declarations after TDS has already been deducted.

In such cases, they may need to claim a refund while filing their income tax return.

Impact on Senior Citizens

Senior citizens commonly use Form 15H because interest income is a major source of earnings after retirement.

Important considerations include:

• Total annual income.
• Pension income.
• Interest income.
• Tax liability.

For example:

A retired individual has:

• Pension income.
• Fixed deposits.
• No taxable income.

Submitting Form 15H may help avoid unnecessary TDS deduction if eligibility conditions are fulfilled.

Impact on Businesses and Deductors

Businesses and institutions making payments where TDS applies must properly handle declarations received from taxpayers.

Deductors should:

• Verify forms received.
• Maintain records.
• Follow reporting requirements.

Examples of deductors include:

• Banks.
• Companies.
• Financial institutions.

Incorrect processing of declarations can create compliance issues for deductors.

Role of Digital Tax Compliance

Tax compliance has become increasingly digital.

Taxpayers now use:

• Online banking portals.
• Income tax portals.
• Digital submission systems.

The Income Tax Department has been moving towards simplified digital compliance systems under the updated tax framework, including resources and utilities for taxpayers under the Income-tax Act, 2025.

Digital processes help:

• Reduce paperwork.
• Improve tracking.
• Increase transparency.

Practical Example: Choosing the Correct Form

Case 1: Young Individual

Age:

35 years

Income:

• Salary.
• Bank interest.

Tax liability:

Nil

Possible form:

Form 15G (if eligibility conditions are satisfied)

Case 2: Senior Citizen

Age:

70 years

Income:

• Pension.
• Fixed deposit interest.

Tax liability:

Nil

Possible form:

Form 15H (if eligibility conditions are satisfied)

Case 3: Taxpayer With Tax Liability

Income:

• Interest income.
• Business income.

Tax liability:

Applicable

Form 15G/15H may not be appropriate.

Importance of Correct Tax Planning

Selecting the correct declaration form is a small but important part of tax planning.

Taxpayers should review:

• Annual income.
• Tax liability.
• Investment income.
• Applicable declarations.

Proper planning helps avoid unnecessary TDS deductions and compliance problems.

 Form 121 vs Form 15G/15H: Complete Compliance Comparison

Understanding the correct tax declaration form is important because each form serves a different compliance purpose.

While Form 15G and Form 15H are commonly used by taxpayers to request non-deduction of TDS on eligible income, other forms introduced under updated tax frameworks may have separate purposes.

Taxpayers should always verify the applicable form according to:

• Nature of income.
• Type of transaction.
• Deductor requirements.
• Applicable tax provisions.

The Income Tax Department has introduced updated forms and compliance resources under the Income-tax Act, 2025 framework to help taxpayers understand revised procedures.

Detailed Comparison: Form 121 vs Form 15G/15H

How Taxpayers Should Decide Which Form to Submit ?

Before submitting any declaration, taxpayers should review:

Nature of Income

Different income sources may have different tax treatment.

Examples:

• Bank interest.
• Dividend income.
• Investment income.
• Other taxable payments.

A taxpayer should identify the exact income type before selecting a form.

Tax Liability

Taxpayers should calculate:

• Estimated annual income.
• Available deductions.
• Expected tax liability.

For example:

A person earns only bank interest and has no taxable income.

The person may evaluate eligibility for Form 15G or Form 15H.

However, a person with taxable income should not submit these declarations incorrectly.

Form 15G/15H Compliance Timeline

These forms are generally submitted periodically, usually at the beginning of a financial year or whenever applicable income becomes subject to TDS.

Taxpayers should ensure:

• Timely submission.
• Correct details.
• Valid PAN information.

For example:

A bank customer has multiple fixed deposits.

Submitting the declaration at the appropriate time helps the bank consider the request before deducting TDS.

Mistakes That Can Create TDS Problems

Giving Incorrect Information

Tax declarations are based on information provided by taxpayers.

Incorrect declarations may result in:

• Tax adjustments.
• Additional liability.
• Compliance questions.

Ignoring Additional Income

Taxpayers should consider all income sources.

For example:

A person considers only bank interest but ignores:

• Rental income.
• Freelance income.
• Investment income.

This may affect eligibility.

Not Checking Tax Status Every Year

Eligibility may change annually.

A person eligible for Form 15G in one year may not remain eligible in another year.

Taxpayers should review their income position regularly.

Importance for Senior Citizens

Senior citizens commonly use Form 15H because many depend on:

• Pension income.
• Interest income.
• Investment returns.

Before submitting Form 15H, senior citizens should review:

• Total income.
• Tax liability.
• Interest earnings.
• Other investments.

For example:

A retired individual has:

• Pension income.
• Fixed deposit interest.
• Savings interest.

The person should calculate total income before submitting the declaration.

Importance for Banks and Deductors

Banks and other deductors have an important role in processing tax declarations.

They need to:

• Collect declarations.
• Verify details.
• Maintain records.
• Follow reporting requirements.

Proper processing helps ensure correct TDS compliance.

For businesses handling multiple payments, maintaining proper TDS records is essential.

Digital Submission of Tax Forms

Tax compliance has become increasingly digital.

Many institutions now allow taxpayers to submit declarations through:

• Internet banking.
• Online portals.
• Digital platforms.

Digital processes help:

• Reduce paperwork.
• Improve tracking.
• Provide confirmation records.

Taxpayers should maintain acknowledgement details after submission.

Form Submission Checklist for Taxpayers

Before submitting Form 15G/15H or any applicable declaration form, taxpayers should check:

Practical Example: Understanding the Difference

Example 1: Young Taxpayer

Age:

28 years

Income:

• Savings interest: ₹20,000
• Other income: Nil

Expected tax liability:

Nil

The taxpayer may evaluate eligibility for Form 15G.

Example 2: Senior Citizen

Age:

68 years

Income:

• Pension.
• Fixed deposit interest.

Expected tax liability:

Nil

The taxpayer may evaluate eligibility for Form 15H.

Example 3: Taxpayer With Taxable Income

Income:

• Salary.
• Interest income.
• Rental income.

Tax liability:

Applicable

Form 15G/15H may not be suitable.

Frequently Asked Questions (FAQs)

1. What is Form 15G?

Form 15G is a declaration submitted by eligible individuals requesting non-deduction of TDS on certain income where applicable conditions are satisfied.

2. What is Form 15H?

Form 15H is a similar declaration specifically meant for eligible senior citizens.

3. Can senior citizens submit Form 15G?

Generally, senior citizens use Form 15H, subject to applicable conditions.

4. Can Form 15G stop TDS deduction on fixed deposits?

Eligible individuals may submit Form 15G for applicable interest income if conditions are satisfied.

5. Is Form 15H mandatory for senior citizens?

It is not mandatory, but eligible senior citizens may submit it to request non-deduction of TDS.

6. What happens if TDS is deducted despite eligibility?

The taxpayer can generally claim eligible TDS credit while filing the income tax return.

7. Can a person submit these forms every year?

Yes, eligible taxpayers generally need to submit declarations as required for each relevant period.

8. What happens if incorrect information is provided?

Incorrect declarations may lead to tax compliance issues.

9. Do banks accept digital submission of these forms?

Many banks provide online submission facilities.

10. Can tax professionals help with TDS compliance?

Yes, professional assistance can help taxpayers understand eligibility and manage tax compliance correctly.

Need Help With TDS and Income Tax Compliance?

Managing TDS declarations requires proper understanding of income, eligibility conditions, and tax rules.

At FilingSuvidha, we assist individuals and businesses with complete taxation solutions.

Our services include:

✔ Income Tax Return Filing
✔ TDS Compliance Support
✔ Tax Planning Assistance
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Need help managing TDS, tax declarations, or income tax compliance? Connect with FilingSuvidha experts for professional guidance.

Contact FilingSuvidha

📧 Email: info@filingsuvidha.com
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