Taxes, an inevitable part of life, can sometimes offer exceptions and reliefs that are not commonly known. In certain cases, the onus of tax deduction can be shifted away from your earnings. This intriguing prospect becomes a reality when either the payer of your income is a specified institute or when you, as the recipient, choose to assert control over your tax liabilities by submitting a self-declaration in the form of either Form 15G (if you’re not a senior citizen) or Form 15H (if you are a senior citizen).
This article is your comprehensive guide through the maze of tax deductions, focusing on Form 15G and Form 15H, to help you understand when and how to file these declarations. We’ll also explore the crucial process of intimating the tax department and why retaining these declarations for seven years is essential. So, let’s embark on this journey to uncover the pivotal aspects of these forms and make your tax management more informed and effective.
Page Contents
No deduction of tax in certain cases
Introduction
In certain cases, tax may not be required to be deducted from payments if either payer is a specified institute or the recipient files a self-declaration in Form 15H (if the recipient is a senior citizen) or Form 15G (for other individuals) for no deduction of tax.
When declaration in Form 15G or Form 15H can be filed?
A self-declaration for non-deduction of tax can be filed by eligible individuals in Form 15G or Form 15H for eligible income. The declaration must be filed again if the estimated income of the payee changes.
In case of Resident non-senior citizen
A resident individual can file a declaration for non-deduction of tax under Section 194 for ‘Dividend’ and under Section 194EE for ‘National Saving Scheme’, if his income (in respect of which he is eligible to file a declaration) does not exceed the maximum exemption limit and tax on his estimated total income for the financial year is nil.
In case of Non-corporate taxpayers
Non-corporate taxpayers (other than a company or a firm) can file a declaration for non-deduction of tax under the following provisions if their income (in respect of which it is eligible to file a declaration) does not exceed the maximum exemption limit and tax on their estimated total income for the financial year is nil:
- Section 192A: TDS from payment of the accumulated balance due to an employee
- Section 193: TDS from Interest on Securities
- Section 194A: TDS from Interest other than Interest on Securities
- Section 194D: TDS from Insurance Commission
- Section 194DA: TDS from payment in respect of life insurance policy
- Section 194-I: TDS from Rent
- Section 194K: TDS from income in respect of units (Resident)
In case of Resident senior citizens
Resident senior citizen (whose age is 60 years or above) can file a declaration for non-deduction of tax under the following provisions if the tax on his estimated total income is nil for the financial year after considering the rebate under section 87A:
- Section 192A: TDS from payment of accumulated balance due to an employee
- Section 193: TDS from Interest on Securities
- Section 194: TDS from Dividend
- Section 194A: TDS from Interest other than Interest on Securities
- Section 194D: TDS from Insurance Commission
- Section 194DA: TDS from payment in respect of life insurance policy
- Section 194EE: TDS from payment in respect of deposits under National Saving Scheme
- Section 194-I: TDS from Rent
- Section 194K: TDS from income in respect of units (Resident)
How to submit the declaration in Form 15G or Form 15H?
The declaration can be submitted in writing to the payer in duplicate in Form 15H for senior citizens and Form 15G for other persons. The declaration can be submitted in paper format or electronically after verification. Once the declaration and PAN are provided to the payer, the tax will not be deducted at the source.
Intimation to Department
The payer of income is required to allot a Unique Identification Number (UIN) to all declarations (paper/electronic) filed by the payee. The payer of income is also required to digitize all paper declarations. The UIN consists of three fields, which are as follows:
a) Sequence number: This is a 10 Alphanumeric Number which starts with an alphabet followed by 9 digits. In the case of Form 15G, the alphabet shall be ‘G’ and in the case of Form 15H, it shall be ‘H’. For example, G000000001 or H000000001.
b) Financial year for which declaration is being furnished
c) TAN of the payer.
The electronic and digitized declarations shall be uploaded by the payer on a quarterly basis on the e-filing site (https://www.incometax.gov.in/iec/foportal/) under his digital signature within:
(a) 15 days from the end of the first, second, and third quarter
(b) 30 days from the end of the fourth quarter.
Apart from uploading declarations in Form No.15G/15H, the payer shall have to include the details of transactions, in respect of which Form 15G/15H has been received, in the quarterly TDS Statement even if no tax is deducted during the quarter. The payer shall quote ‘Sequence Number’ (Field ‘a’ of UIN) in the quarterly TDS statement against the transaction covered under Form No. 15G/15H declaration.
The payer will be responsible for reconciliation of the allotted UINs vis-a-vis reported UINs to the Income-tax department through reporting in quarterly TDS statements as well as through uploading of declarations on a quarterly basis.
Retention of Declaration in Form 15G or Form 15H for 7 Years
An income-tax authority may require the person responsible for payment to make available the declaration for the purposes of verification or any proceeding under the Act before the end of 7 years from the end of the financial year in which the declaration in Form No. 15G/15H has been received. This means that the person responsible for payment must keep the declaration for 7 years from the end of the financial year in which the declaration was received.
Important Points on No deduction of tax in certain cases of Form 15G or Form 15H
1. Tax may not be required to be deducted from payments if either payer is a specified institute or the recipient files a self-declaration in Form 15H (if the recipient is a senior citizen) or Form 15G (for other individuals) for no deduction of tax.
2. A resident individual can file a declaration for non-deduction of tax under Section 194 for ‘Dividend’ and under Section 194EE for ‘National Saving Scheme’, if his income (in respect of which he is eligible to file a declaration) does not exceed the maximum exemption limit and tax on his estimated total income for the financial year is nil.
3. Non-corporate taxpayers (other than a company or a firm) can file a declaration for non-deduction of tax under Sections 192A, 193, and 194A, if their income (in respect of which it is eligible to file a declaration) does not exceed the maximum exemption limit and tax on their estimated total income for the financial year is nil.
4. The payer of income is required to allot a Unique Identification Number (UIN) to all declarations (paper/electronic) filed by the payee. The payer of income is also required to digitize all paper declarations. The UIN consists of three fields, which are as follows:
a) Sequence number: This is a 10 Alphanumeric Number which starts with an alphabet followed by 9 digits. In the case of Form 15G, the alphabet shall be ‘G’ and in the case of Form 15H, it shall be ‘H’. For example, G000000001 or H000000001.
b) Financial year for which declaration is being furnished
c) TAN of the payer.
5. The electronic and digitized declarations shall be uploaded by the payer on a quarterly basis on the e-filing site (https://www.incometax.gov.in/iec/foportal/) under his digital signature within:
(a) 15 days from the end of the first, second, and third quarter
(b) 30 days from the end of the fourth quarter.
6. An income-tax authority may require the person responsible for payment to make available the declaration for the purposes of verification or any proceeding under the Act before the end of 7 years from the end of the financial year in which the declaration in Form No. 15G/15H has been received. This means that the person responsible for payment must keep the declaration for 7 years from the end of the financial year in which the declaration was received.
