Form 15G and 15H Who Should Submit Them and How to Avoid Unnecessary TDS Deductions
By Rajeev Sinha 13-05-2026 1
Not every life insurance payout is taxable. In many cases, maturity proceeds are exempt under Section 10(10D) if the policy meets the prescribed conditions. If the payout is exempt, the insurer should not deduct TDS in the first place. This is why you should first check whether your policy is tax-free before thinking about form 15G and 15H.
TDS may arise when the proceeds are taxable. This can happen in some policies where the premium rules do not satisfy the exemption conditions, or in specific cases such as taxable ULIP maturity proceeds. UndIf you hold a life insurance plan as an investment policy, you need to know when tax may be deducted at source and when it should not. Form 15G and 15H are useful self-declaration forms that can help you stop avoidable TDS on eligible payouts, but they are not meant for every case. In life insurance, the right use of these forms depends on the policy type, your age, your income, and whether the payout is taxable under the Income Tax Act.
What form 15G and 15H are
Form 15G and Form 15H are declarations you give to the payer, such as an insurance company, to state that your tax liability for the year is nil. They are used when the payer would otherwise deduct TDS on interest, dividends, or certain insurance proceeds. The forms do not remove tax if tax is actually due. They only help prevent deduction when you meet the required conditions.
Form 15G is meant for resident individuals below 60 years of age and Hindu Undivided Families. Form 15H is meant for resident individuals aged 60 years or above. Companies, partnership firms, NRIs, and other non-individual entities cannot use these forms. You must also have a valid PAN and submit truthful income details.
When life insurance payouts attract TDS
er Section 194DA, if a life insurance payout is taxable and exceeds Rs.1 lakh, the insurer may deduct TDS at 5% if your PAN is available. If PAN is not provided, the rate can go up to 20%. That is a significant difference, so PAN details matter.
Form 15G for younger policyholders
If you are below 60 and receive a taxable life insurance payout, form 15G may help only when your total income is still below the taxable threshold. For example, if you have limited salary income and a small taxable policy payout, the insurer may accept the form and avoid TDS deduction. You need to include the estimated income, the expected payout, and the tax-saving deductions you plan to claim. Accuracy matters because a wrong declaration can create tax trouble later.
Form 15H for senior citizens
If you are 60 or above, form 15H is the right declaration. It is especially useful if your pension, interest, rent, or taxable insurance proceeds do not create any tax payable after deductions. Senior citizens benefit from this form because it is designed for resident individuals in this age group, regardless of whether income exceeds the basic exemption limit. The key condition is simple: your tax liability must still be nil.
How to avoid unnecessary TDS deductions on life insurance
First, verify if your payout is exempt under Section 10(10D). If it qualifies based on the premium-to-sum-assured ratio, no TDS applies, often making declaration forms unnecessary.
If the payout is taxable, submit Form 15G or 15H before the insurer processes the claim. Most insurers accept these via online portals. Submitting early prevents the need to wait for a tax refund later.
Ensure your PAN is updated to avoid higher TDS rates (up to 20%). Have your estimated income and tax-saving details ready for an accurate declaration. If in doubt, confirm the specific TDS rules with your insurer.
What to do if TDS has already been deducted
If TDS is deducted even though you believed it was not required, do not panic. First, check whether the policy payout is exempt or whether your form was rejected due to incomplete details. If the deduction was valid, you can claim the TDS as credit in your income tax return. The amount will either reduce your final tax bill or come back as a refund.
Keep the TDS certificate and policy payout statement from the insurer. These documents help you match the deduction with your return filing. If the deduction was clearly unnecessary, you can still raise the issue with the insurer. However, refund through the tax return is usually the practical route once the deduction has already happened.
Conclusion
Knowing how form 15G and 15H work can save you from avoidable TDS on a life insurance payout, especially when your investment policy is tax-sensitive and your income remains below the taxable limit. The main rule is simple: first check whether the policy proceeds are exempt, then see whether you qualify to submit the right form. Use form 15G if you are below 60 and resident, and form 15H if you are a resident senior citizen with nil tax liability.
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