Form 15G & Form 15H to Save TDS on Interest on Fixed Deposit

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Form 15G & Form 15H are self-declaration forms required to be furnished by the Assessee to his Banker for Nil Deduction/Lower Deduction of TDS on Interest on Fixed Deposit.

As per Section 194A of the Income Tax Act, 1961, all Banks and Financial Institutions have been mandatorily instructed to deduct TDS on all Interest Payments exceeding Rs. 10,000 in any Financial Year.Thus, whenever any customer receives more than Rs. 10000 as Interest from a Bank, the Bank will have to deduct Tax on such Income arising in the hands of the customer and will directly pay this Tax to the Govt. on the behalf of the customer.

The Banker will issue a TDS Certificate in Form 16A for the TDS so deducted mentioning the details of TDS Payment with the Govt. While filing your Income Tax Return, the Assessee shall furnish the details mentioned in his Form 16A which should be in accordance with the TDS Reflected in Income Tax Form 26AS

While framing this Section, a case arose wherein the Interest received on Fixed Deposits was more than Rs. 10,000 and therefore TDS on Interest had to be deducted, but that person was not liable to pay Income Tax as his Income didn’t fall in the Taxable Limits as per the Income Tax Slabs.

In such cases, wherein the Tax Liability of the Assessee is Nil and TDS on Interest is liable to be deducted as his Interest Income is more than Rs. 10000, the assessee can furnish Form 15G/Form 15H for Nil/Lower Deduction of TDS.

As per RBI guideline dated 31st May 2013, at the time of submission of Form 15G/15H, the Banker will also issue an acknowledgement to the assessee stating the receipt of the form.

Form 15G

Form 15G can be submitted by non-senior citizens i.e. individuals who are less than 60 years of age and who satisfy both the criteria’s mentioned below:-

  1. The final tax on his estimated total income computed as per the provisions of the Income Tax Act should be nil
  2. The aggregate of the interest & other incomes received during the financial year should not exceed the basic exemption limit as per the prevalent Income Tax Slabs

The above conditions can be explained with the help of the below mentioned examples:-

Particulars

Mr. A

(Age: 46 years)

Mr. B

(Age 55 years)

Interest Income

60,000

2,50,000

(Add) Other Income

1,20,000

0

Total Income before Deductions

1,80,000

2,50,000

(Less) Deductions

(1,00,000)

(1,00,000)

Total Income after Deductions

80,000

1,50,000

Can Form 15G be furnished ?

YES

15G can be furnished as Total Income before deductions does not exceed the basic exemption limit as per Income Tax Slab Rates

NO15G cannot be furnished as Total Income before deductions exceeds the basic exemption limit as per Income Tax Slab Rates

Form 15G 600x471 Form 15G & Form 15H to Save TDS on Interest on Fixed Deposit

Form 15H

Form 15H can be submitted by senior citizens only i.e. those who are above 60 years of age and satisfy the following criteria:-

  1. The final tax on his estimated total income computed as per the provisions of the Income Tax Act should be nil

The above condition can be explained with the help of an example.

Particulars

Mr. C

(Age 61 years)

Mr. D

(Age 63 years)

Interest Income

2,55,000

1,80,000

(Add) Other Income

90,000

1,80,000

Total Income before Deductions

3,45,000

3,60,000

(Less) Deductions

(1,00,000)

(1,00,000)

Total Income after Deductions

2,45,000

2,60,000

YES

15H can be furnished as Total Income after deductions is below the amount chargeable to Income Tax as per Slab Rates and final tax payable is NIL

NO

15H cannot be furnished as Total Income after deductions is above the amount chargeable to Income Tax as per Slab Rates and thus, tax would be payable on this income

 

Difference between Form 15G and Form 15H

Although both these forms are for Nil/Lower Deduction of TDS on Interest and require that the final tax liability on the estimated income shall be Nil, there are some differences in these forms with respect to their use:-

  1. Form 15H is required to be furnished by Senior Citizens who are above the age of 60 years whereas Form 15G is required to be furnished by Individuals other than Senior Citizens
  2. Form 15H cannot be furnished by HUF whereas HUF’s can furnish Form 15G
  3. Form 15H can be furnished even if the aggregate total income is more than the basic exemption limit as per the Income Tax Slabs but Form 15G can only be furnished if the aggregate income is less than the basic exemption limit

Form 15G and Form 15H are available at all Bank Branches and you can request your Banker for this Form at the Counter. These forms can also be downloaded online from

Form15G  http://www.incometaxindiapr.gov.in/incometaxindiacr/ppt_html20081017/TDSTutorial/15G.pdf

Form 15H http://law.incometaxindia.gov.in/DITTaxmann/IncomeTaxRules/pdf/itr62Form15H.pdf

While submitting these forms, the assessee would also be required to disclose the details of Investments like Shares, Debentures, Fixed Deposits, Mutual Funds and other Investments held in the name of the Assessee

Please Note that Form 15G and Form 15H both have a validity of 1 financial year only. These forms are only valid for the Financial Year in which you have furnished these Forms and in case you want to apply for Nil/ Lower Deduction of TDS on Interest on Fixed Deposit in another financial year, you will have to refurnish these forms again to your Banker.

In case, you have not furnished Form 15G/Form 15H, and the banker has deducted TDS on Interest, there is no need to worry as you can always claim TDS Refund for the TDS Deducted in excess of your Income Tax Liability. The Assessee shall furnish the details of the TDS Deducted as mentioned in Form 16 A to the Income Tax Department while filing the Income Tax Return and the TDS deducted in excess of the Tax Payable shall be refunded to the Assessee with Interest.

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