IF Form 15G or Form 15H is not submitted in time to the respected, then you will incur TDS on the income you are earning. For example, Banks which is giving interest to you will deduct the TDS from the interest you are earning.
Form 15G/Form 15H is only a declaration that no TDS should be deducted on your interest income since tax on your total income is nil. Interest income from fixed deposits, recurring deposits, and corporate bonds is always taxable.
Interest income from fixed deposits and recurring deposits is taxable. For senior citizens deduction of Rs.50,000 is available under section 80TTB for the interest income from fixed deposits/post office deposits/deposits held in a co-operative society. You should submit this form only if the tax on your total income is zero along with other conditions.
You must inform your bank or the respective authority from which you are receiving the income that tax on your total income is not zero. The bank or the authority will make changes and deduct TDS accordingly. You should report the entire interest income in your tax return and pay tax on it as applicable.
You don’t need to submit these forms directly to the income tax department. Just submit them to the deductor, and they will prepare and submit these forms to the income tax department. At times these forms can also be filled and submitted in the bank.
Forms 15G/15H are valid for one financial year ending on Mar 31 of every year. So, you will have to submit these forms every year if you are eligible. Submitting them as soon as the financial year starts will ensure that no deduction is done on any interest income earned.