Form 15G and form 15H are used for avoiding the TDS deduction at source if deductee expects his Income to be lower then the taxable limit. In this article we are discussing important points to remember while submitting the Form 15G and Form 15H to the deductor. We have also included frequently asked questions and answers on Form 15G and Form 15H.
Form 15H :- Declaration under sub-section (1C) of section 197A of the Income-tax Act, 1961, to be made by an individual who is of the age of sixty years or more claiming certain receipts without deduction of tax.
Form 15G:– Declaration under sub-sections (1) and (1A) of section 197A of the Income-tax Act, 1961, to be made by an individual or a person (not being a company or a firm) claiming certain receipts without deduction of tax of tax.
Difference between form 15G and 15H:-
1. Form 15G can be submitted by an individual below the Age of 60 Years while form 15H can be submitted by senior citizens i.e. individual’s above the age of 60 years.
2. Form 15G can be submitted by Hindu Undivided families but form 15H can be submitted only by Individual above the age of 60 years.
3. 15G CAN NOT BE filed by any person whose income from interest on securities/interest other than “interest on securities”/units/amounts referred to in clause (a) of sub-section (2) of section 80CCA exceeds maximum amount not chargeable to tax.
In a nutshell we can say that anybody whose tax on estimated income is not NIL and having income from interest on securities/interest other than “interest on securities”/units/amounts referred to in clause (a) of sub-section (2) of section 80CCA exceeds maximum amount not chargeable to tax can not file DECLARATION u/s 15G.
However, if you are eligible and also fulfill the conditions, the payer can not deduct the tax even if it is above Rs.10,000.
Note 1:These Forms can only be used for payments like dividends, interest on securities, interest other than interest on securities, national saving schemes, interest on units, premature withdrawal from provident fund (wef june, 2015), rent (wef June, 2016), insurance commission (wef June,2017), payment in respect of life insurance policy (wef june,2015)
Note 2 :- Maximum amount not chargeable to tax for Hindu Undivided family (HUF) and Individuals (below the age of 60 years) for A.Y. 2019-20 is Rs. 2,50,000/- .
Senior Citizens who are eligible to file Declaration in Form 15H have no such conditions. They can submit Form 15H even if their Total Income from interest on securities/interest other than “interest on securities”/units/amounts referred to in clause (a) of sub-section (2) of section 80CCA exceeds maximum amount not chargeable to tax (Rs. 3,00,000 in case of senior citizen and Rs 5,00,000 for super senior citizen) but if tax payable by them is NIL. This is clear from the declaration is part I of the form 15H, which reads as under:-
I………………………………………………. do hereby declare that I am resident in India within the meaning of section 6 of the Income-tax Act, 1961. I also hereby declare that to the best of my knowledge and belief what is stated above is correct, complete and is truly stated and that the incomes referred to in this form are not includible in the total income of any other person under sections 60 to 64 of the Income-tax Act, 1961. I further declare that the tax on my estimated total income including *income/incomes referred to in column 15 *and aggregate amount of *income/incomes referred to in column 17 computed in accordance with the provisions of the Income-tax Act, 1961, for the previous year ending on ………………………………. relevant to the assessment year ………………………………. will be nil.
FREQUENTLY ASKED QUESTION ANSWERS ON FORM 15G AND FORM 15H
Question 1:- I am 70 years old. I invested a sum of Rs 10,00,000 in January 2014, in GOI 8 per cent savings bonds (taxable), 2003, via a leading private bank. The bonds issued were on a cumulative basis with a maturity period of six years. The total interest payable at the time of maturity is Rs 5,50,000. I have declared the income from the bonds on an accrual basis y-o-y, and have been filing tax returns since A/Y 20015/16. But the bank is not accepting Form 15H stating that the total interest payable on maturity is more than the threshold limit for senior citizens – Rs 5,00,000 and is insisting on my submitting Certificate u/s 197 from the IT office. What do I do?
Answer 1:- The bank should have deducted tax at source. It seems the bank has not provided for the accrued interest and is therefore not accepting Form 15H. You can prove that the tax on your total income of the previous year in which the interest is to be received shall be nil, even after including the cumulative interest the bank should not resort to tax deduction at source. You can submit Form 15H for deduction of tax at source for A.Y. 2019-20.
Question 2 :- I am a senior citizen having income liable for tax deduction at source in respect of my deposits with State Bank of Hyderabad. They asked me whether I would be filing declaration in Form 15G or 15H in the first week of March in respect of payments made during the year so that I am in a position to judge whether I have taxable income for the year or not and file declaration in Form 15H, if I have no taxable income. On the other hand, State Bank of India and, I understand, some other banks require form at the time of deposit itself. It may not be proper for the bank to act on such declaration made in one year for another year or for that matter act on a declaration which had become stale filed in earlier part of the year for payment towards the end of the year. What is the correct position of law?
Answer 2 :- The doubt raised by the reader is a valid one. The law itself does not provide for any date on which the declaration is required to be filed as long as it relates to the income of the year and filed during the year. Since the deduction of tax at source has to be decided on the date of each credit or payment, deduction has to be made for each such credit or payment. Where an investor is not able to file the declaration in earlier part of the year in view of the uncertainty as to the prospect of his income crossing the exemption limit, he can probably inform the bank that deduction could be deferred till the end of the year. But then, the bank would like to have the declaration at the time of payment so that the declaration may necessarily be filed before the first quarterly payment, if the interest is payable quarterly. The difficulty for the investor in ascertaining the income in advance in such cases cannot be avoided. Tax may have to be deducted and refund applied in due course in such cases.
Question 3: What should I do if I am not liable to pay tax and TDS is not required to be deducted?
Answer 3 :- To avail the benefit of deduction of tax at source at Nil/lower rate, you may submit any of the following documentation :
Certificate from the Indian tax authorities: Certificate under section 197 of the Act issued by the Assessing Officer for nil / concessional rate of TDS can be submitted by any bondholder including companies and firms. The certificate should be submitted by the deductee to the deductor.
Form 15G: If you are a resident person (other than a company, Co-operative society or a firm), you can submit Form 15G in duplicate to deductor. As per the provisions of section 197A of the Act, Form 15G can be submitted provided the tax on your estimated total income for the financial year computed in accordance with the provisions of the Act is NIL and the interest paid or payable to you does not exceed the maximum amount which is not chargeable to tax.
Form 15H: If you are a senior citizen, i.e. if you are of the age of 60 years and above at any point of time during the financial year, you can submit Form 15H even if your income exceeds Rs.3,00,000 (for senior citizen)/500,0000 (for super senior citizen) p.a. for the purposes of non-deduction of tax at source if your estimated total income for the financial year computed in accordance with the provisions of the Act is NIL.
Entities exempt from tax as per CBDT Circular : For certain specified entities whose income is unconditionally exempt under section 10 of the Act and who are statutorily not required to file return of income as per section 139 of the Act, CBDT has vide Circular no. 4/2002 dated July 16, 2002, granted blanket TDS exemption. Some examples of the specified entities are provident funds, gratuity funds, local authority, hospitals exempt under section 10(23C)(iiiac), educational institutions or university exempt under section 10(23C)(iiiab).
Exemption for insurance companies: Certain entities such as Life Insurance Corporation of India, General insurance Corporation of India along with its four subsidiaries or any other insurer are eligible to receive interest on securities without deduction of tax at source, if such securities are owned by them or it has full beneficial interest in the same.
Question 4:- I am an account holder in a nationalised bank and I filed Form 15H. The bank authorities refused to give acknowledgment for the same, though I have given it in duplicate. What is more is that they have deducted tax though I have no taxable income. What is the remedy for the amount already deducted and to avoid such deduction in future?
Answer 4:- Where tax has already been deducted and deposited by the bank, the only recourse for the assessee is to file a refund claim along with the return with the assessing officer and await the refund. It is possible for an assessee to seek remedy for deficiency of service in a consumer forum or to file a complaint with the Ombudsman asking for compensation for the trouble to which the reader has been put to. But then, the reader had failed to press for an acknowledgment. He should have complained about denial of acknowledgment at that stage to the concerned superior officers or should have sent it by registered post acknowledgment due for purposes of evidence for his case. In fact, it is not open to the bank official to refuse acceptance of any document sought to be served on the bank or refuse acknowledgment, where demanded.
Some of the taxpayers have complained us about the inordinate delay in getting TDS certificate to enable claim of refund in time. Such complaints received from time to time indicate the inordinate delay on the part of even banks and large corporate as regards this statutory duty to issue such certificates promptly. In the case of banks, this is again a matter on which complaint should be made to senior officers of banks in writing and on failure of response to the Ombudsman. A complaint to the TDS section of the Income-tax Department, which is expected to enforce law regarding issue of TDS certificates promptly, should be the most effective remedy, if only the TDS cell activates itself to enforce the law and the rules on those responsible for tax deduction at source for the benefit of the taxpayers.
Also Read :- Download, know, FAQ on Form 15G & 15H
Please Note – In Respect of all the Provision related to Submission of Form 15H Finance Bill 2012 has reduced the Age Limit for Senior Citizen to 60 Years from 01.07.2012
(Republished with amendments)