The Union Budget 2026–27 has introduced a high-impact compliance reform for investors by enabling Form 15G and Form 15H to be filed through depositories under the Income Tax Act, 2025.
Though less discussed, this change significantly improves convenience, accuracy, and compliance for taxpayers receiving interest and dividend income.
What Was the Problem Earlier?
Until now, taxpayers were required to:
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Submit Form 15G / 15H separately to each bank, company, or payer
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Track multiple declarations across different institutions
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Face TDS deduction if even one declaration was missed or delayed
This often led to unnecessary TDS deductions and refund claims, especially for senior citizens and small investors.
What Has Changed Now?
As per the Budget announcement:
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Taxpayers can now submit Form 15G / 15H directly to the depository
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The depository will electronically share the declaration with all relevant payers
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Banks, companies, and other payers can rely on centralised reporting
This eliminates repetitive filings and ensures uniform TDS exemption across income sources.
Who Will Benefit the Most?
This reform is particularly beneficial for:
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Senior citizens claiming TDS exemption using Form 15H
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Retail investors earning interest and dividend income
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Taxpayers holding securities with multiple companies or banks
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Individuals with low or nil taxable income
For many investors, it means no more chasing banks or companies every year.
Why This Reform Matters
Key advantages include:
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Single-point filing instead of multiple submissions
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Reduced chances of wrongful TDS deduction
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Better data accuracy and compliance tracking
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Lower administrative burden for both taxpayers and payers
This aligns with the Government’s move towards technology-driven, trust-based compliance.
Reporting and Compliance
The Budget also proposes that:
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Depositories will report these declarations to the Income Tax Department
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Reporting frequency will be quarterly instead of monthly, reducing compliance load
This improves system efficiency without compromising tax oversight.
Effective Date
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Applicable under the Income Tax Act, 2025
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Effective from 1 April 2026
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Detailed operational guidelines will be notified separately
Practical Takeaway
Investors should:
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Ensure PAN and income details are correctly linked with depositories
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Monitor notifications for procedural rollout
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Use this facility to avoid unnecessary TDS and refund delays
This is a quiet reform with real-world impact, especially for senior citizens and small investors.
Reference: Union Budget 2026–27 – Speech of the Finance Minister (Direct Taxes)