Form 15G – Form 15H and TDS details,features, eligibility and conditions.

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Last updated on November 14th, 2017 at 06:21 pm

Is there any way out to be assured that your bank does not deduct TDS on interest if your income is not taxable? The banks deduct TDS when the interest income is more than Rs 10,000 in a year. But if your income is below the taxable limit, then you can submit forms 15G and 15H to the bank requesting not to deduct the TDS on your interest.

 

Form 15G and Form 15H

Form 15G and form 15H are the documents which are submitted for not deducting TDS. These forms are submitted to make sure that your TDS is not deducted from your income. To apply for Form 15G and 15H you must have a PAN Card before applying. The Form 15H is for the senior citizens and Form 15G is for everyone else. Some of the banks allow to submit this forms online itself. These forms are valid for 1 financial year. So if you are eligible then you need to submit these forms every year.

Features of Form 15G and 15H

  • These forms are used only for making the payments in the nature of the interest of securities (Banks/ Company Deposits), Dividends etc. These forms are not applicable for making other payments.  Form 15G is required to fill in PF Withdrawal purpose if they don’t want to get their taxes deducted.
  • These forms can be submitted to the banks, post office, companies etc.
  • These forms have to be filed in duplicate making three copies, to the players which can be a bank, post office or a company etc. The player or the institution takes the data and stores in the records database.
  • The record contains the entire interest to be paid to the depositor or the lender without the TDS.
  • Form 15G is for the Indian Residents, HUFs and trusts whereas, Form 15H is for above 60 years of age.

Like for an example, you have opened a Fixed Deposit in the bank. If your interest income exceeds more than Rs 10,000 in a year then the bank will deduct 10% TDS or the Tax at Source. If you do not submit the PAN details then the TDS rate will hike at 20%. So to avoid TDS rate on interest income you need to submit the Form 15G and Form 15H.

TDS-Tax Deduction Source

TDS is a certain percentage that is deducted at the time of the payments of various kinds such as salary, commission, rent, interest on dividends etc. The deducted amount is then remitted to the Government account. This withheld amount can be balanced against the tax due. The person or the organization who is deducting the tax is called deductor and the person or the organization from whose the tax is deducted is known as deducted.

Objective Behind Filing the Form 15G and H

The TDS is deducted on some income if the amount is above Rs 5000- Rs 10,000 if the player is a bank. If the yearly payment does not exceed the limit then the TDS is not deducted.

Who can fill Form 15G and 15H

  • The Indian residents only, HUF and AOP can submit the form 15G/H. While Form 15G is the Indian Residents who are below the age of 60 years. While the form 15H is for the Senior Citizens above 60 years of age.
  • The NRI Companies and the firms are not applicable to submit the Form 15G/H. It is because for an NRI it can happen that their total income in India is less than the limit in the Financial Year. In such cases, you need to apply to the Income Tax Officer in your Jurisdiction in India requesting for a rejection of TDS. If the Income Tax Officer grants you the application of rejection of TDS, then you need to submit this to your payers, such as the bank claims, claim TDS exemptions. This certificate is called as Tax Exemption Certificate.

Validity of Form 15G/H

Both the Forms have the validity of One Financial Year only. Since, they are valid only for a year, if a person wants to apply for Nil/Lower Deductions on TDS on interest on Fixed Deposit for another Financial Year then you need to apply for this Forms again to your Banker.

Conditions For Filing the Form 15G

Firstly, the first and foremost condition for filing the form is a valid reason to request the bank or the Financial Institution not to deduct TDS.

The basic conditions for filing the Form 15G are

  • The Final tax on estimated total income computed as per the Income Tax Act should be Nil.
  • The aggregate of the Interest (excluding interest earned on the securities) received during the Financial Year should not exceed the basic exemption slab- 2.5 Lac in Annual Year 2015-16 and Annual Year 2016-17.
  • if you meet these criteria, then you are eligible to file a 15G Form. You need to meet these two criteria. If the interest income is less than the basic exemption, but your tax liability is not Nil then you are not eligible to file the Form 15G.

Conditions For Filing the Form 15H

  • Form 15H can be filed only the senior citizens who are above 60 years of age.
  • The Final Tax on the investor’s estimated total income should be nil.
  • So if you are above the age 60, then your taxable income for the financial year can be up to Rs 3 Lacs and if you are a super senior citizen above 80 years of age then the limit is Rs 5 Lacs.

If You Do Not Fill/ Miss To Fill The Form 15G/H

  • If in case you are not liable to pay tax and you did not submit the Form 15G/H then you can get TDS certificate or Form 16A from the Bank and claim the refund through your annual income tax filing. The Income Tax Department will refund back if they found you are eligible for the pay tax criteria.
  • If you provide a wrong information in the form then you might be charged with a Penalty under Section 277 of the Income Tax Act. This may include imprisonment ranging from three months to 2 years of fine. This term can also exceed to 7 years if the tax exceeds to Rs 25 Lacs.

Obtain An Acknowledgement After Submitting Form 15G/H

A lot people are having complaints regarding the wrong deduction of Tax even when the Form 15G/H is submitted. RBI states that these sorts of the issue may arise because of the misplacement of the of the forms or the bank must have lost the track. So to avoid these sorts of issues the RBI decides to give an acknowledgment at the time of Receipt of Form 15G/H. This will help to build a system of accountability and the accounts of the customers will be safe and secure and they will not be put into any inconvenience due to any omission on the part of the Banks.

Issue PAN Card Details When Submitting Form 15G/H

Make sure that you submit your PAN Card details to the bank/post office or the company while submitting the form. If you are failed o provide the PAN card details then the TDS will be deducted even if you have submitted the form 15G/H.

The Finance Act, 1982 has inserted a new section 197A with effect from June 1st, 1982. The section enables an individual who is resident of India and whose estimated total income of the previous year is less than the minimum liable to income tax to receive interests on securities, dividends and other interest without the deduction of tax at source under sections 193, 194, 194A of the Act on furnishing a declaration, in duplicate, in prescribed form and verified in the prescribed manner. Rule 29C and Form Nos. 15F, 15G, and 15H have been inserted in the Income Tax Rules, 1962 by the Income Tax (Fifth Amendment) Rules, 1982 prescribing the forms for the purposes of Section 197A and laying down the procedure for furnishing the Declaration Form

Hence, make sure that you file the Form 15G and Form 15H correctly so that you won’t face any trouble.

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