For a layman TDS or TAX is very cumbersome to handle and they are afraid of various procedures related to it. So, in this article I have tried to point out few things which an Assessee/ Taxpayer needs to know related to TDS and Form 15G/ Form 15H applicability :-

[1]  TDS is deducted on CBS (core banking solutions) approach. Before 01-06-2015, TDS was deducted by banks considering branch customer approach. i.e. interest earned on deposits kept with different branches of same bank was not clubbed by bank for TDS purpose. Now, the bank will deduct TDS considering bank customer approach. i.e.  interest earned on deposits kept with different branches will be clubbed by bank for TDS purpose. So, customers cannot escape by keeping deposits in different branches of same bank for TDS purpose.

[2] TDS will be deducted by cooperative banks on Interest paid to their members. So, for investors there is no benefit of being a member of Cooperative Bank for TDS purpose.

[3] The definition of ‘time deposits’ is amended and now TDS is deducted on recurring deposits interest also.

[4] The limit of Rs. 10000/- is applied bank wise and not branch wise .

Form 15H Form 15G to Avoid TDS deduction

[5] TDS is deducted on financial year to year basis and not that it will be deducted whole at the time of maturity. The said limit of Rs.10,000/- will be applied Financial year wise.The said limit of Rs 10,000 has been increased to Rs 50,000 wef 1st April 2018 only if the payee is Senior Citizen.

[6] However, wherever applicable customers can submit Form 15H/ Form 15G  for  non deduction of TDS.

[7] Some points to be taken care of while submitting Form 15G/Form 15H

A. Criteria to be eligible to file form 15G

i ) The assesse must be Individual, HUF, AOP

ii) The assesse must be Resident

iii) The assesse should be less than 60 years

iv) Tax calculated on total income should be NiL

vi) Bank F.D. Interest income should not exceed basic exemption limit (i.e Rs 2,50,000). Otherwise the bank will deduct TDS though you have submitted 15G.

B. Criteria to be eligible to file form 15H

i) The assesse must be Individual

ii) The assesse must be Resident

iii) The assesse should 60 years or more

iv) Tax calculated on total income should be NiL. The assessee can submit 15H, even if the interest income exceed basic exemption limit, provided the tax paid on total income for the relevant previous year is NIL. The basic exemption limit for senior citizen is Rs 3,00,000 and for super senior citizen is Rs 5,00,000

c) The assessee should mention its PAN on their respective forms. The form filed will not be considered by the concerned authority if the assessee fails to mention the PAN or mentions incorrect PAN. In that case TDS will be deducted @20%.

Investors have to submit this form in the beginning of the financial year to avail the benefit of non deduction of TDS. If a customer submits this form after deducting TDS the bank will not refund it as the bank has already transferred it to Income tax department. If TDS is deducted, the customer can get back as a refund only by filing the Return. In regards to this CBDT has made certain clarification which is as mentioned below:

CBDT  has clarified  certain points in respect of filing Form 15G/ Form 15H via Notification No. 6/2017, dated 30-05-2017, it is clarified by the board that:-

1) New Form 15G/ Form 15H has to be filed by the taxpayers if his income for each year changes.

2) Only one declaration is to be made in respect of the income each year before each deductor.

3) If the estimated total income changes and new investments are being made then taxpayers are required to provide particulars of same in the new Form 15G/ Form 15H.

4) While filing New Form 15G/ Form 15H, taxpayer’s needs to provide total number of earlier declarations along with aggregate amount of income for which such Form 15G/ Form 15H have been filed.

E. Central Board of Direct Taxes have now clarified, vide their Office Memorandum F.No.275/36/2009-IT(B) dated May 14, 2009, that nominee of the investors of SCSS can also produce 15G form (declaration of non-deduction of tax from the amount of interest payable) at the time of payment after the death of the depositor.

F. The form should be filed in duplicate. Always take one received copy from bank for proof of submission. The declaration can be filed in paper form or electronically after duly verifying it in electronic process as specified

[8] Apart From TDS on Interest (other Than Interest on Securities) U/s 194A, there are other income for which the assessee can submit Form 15G/ Form 15H for non-deduction of TDS, namely,

Income Section under which the Tax is to be deducted Eligible Assessee Exemption Limit above which  TDS is to be deducted (Rs)
premature withdrawal of provident fund U/s 192A only for individuals 50,000 or more
Interest On securities  U/s 193 Any assesee other than company or firm 5000 in few special cases it is 10,000
Rent U/s 194I Any assesee other than company or firm 180,000
Dividend U/s 194 Resident Individuals 2,500
Payment In respect of Life Insurance Policy 194DA Any assesee other than company or firm 1,00,000
Insurance Commission U/s 194D Any assesee other than company or firm 15,000
National Saving Scheme U/s 194EE only for Resident Individuals 2500

(Republished With Amendments)

Click here to Download Form 15G in word format

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February 2024