According to the Income Tax Act, the tax must be deducted by a bank before payment to the customer on payments such as interest, dividend, etc. However, in case amount of TDS (Tax deducted at Source) deducted by a bank on interest exceeds the income tax payable by such assessee, then such assessee is eligible for a refund. This process can be cumbersome for the Senior Citizens. Therefore, for making it easier for a Senior Citizen, Form 15H was introduced first time in 1st June 2003 via Income Tax (Fourteenth Amendment) Rules, 2003. by the Income Tax Department. This form aims to enable senior citizens in claiming relief from TDS deductions on interest income on deposits in banks made during the financial year, provided they meet eligibility criteria.
Today, senior citizens can receive interest on securities, dividend, etc., without deduction of TDS (Tax Deducted at Source) by furnishing Form 15H. Citizens who are above 60 years of age, can avoid TDS deduction by furnishing this form if the no tax is payable and the total interest income doesn’t exceed INR 2.5 lakhs.
By furnishing Form 15H, the below-mentioned receipts could be received by the Senior Citizens without deduction of TDS.
It’s important here to note that Form 15H could be filed to avoid TDS on the above-mentioned receipts only. However, this form won’t negate the TDS requirement on other incomes such as professional fee, commission, rent, etc. Individuals should have a PAN card for being able to claim TDS relief with Form 15H. This form could be submitted at the banks; however, certain banks today offer online submission facility through their official websites. This form is solely for senior citizens, and are valid for only a single financial year, eligible individuals wishing to claim the TDS deductions need to re-submit it every financial year.
According to the notes to the form, this form can be filed by the senior citizens even if their income for which the exemption is claimed is more than the basic exemption limit (INR 3 lakh/ INR 5 lakh, as applicable). However, the net taxable income after all the income tax deductions available under various provisions and as applicable must be below the exemption limit.