TDS from interest on bank and other deposits are mandatory. If your interest income is more than Rs 10,000/- aggregating in all deposits of a particular branch in any financial year, the bank is bound to deduct TDS @10% on the interest. The rate will be doubled if the assessee fails to submit his PAN to the bank.
I have seen some bank branches where a notice is pasted such as "Submit Form 15G/15H to avoid TDS". This is completely misleading. An account holder can submit Form 15G or 15H(for senior citizens who attained 60 years in anytime in the financial year) only if his total income from all sources does not exceed the threshold limit on which no tax is required to be paid. That means the total income should be non taxable, below Rs 2,50,000/- for senior citizens and Rs 2,20,000/- for others for the current financial year (2013-14).
There is no provision that you declare to the bank not to deduct tax as you undertake to settle it yourself with the authorities. The bank has to deduct tax at source unless you submit form 15G or 15H and that only if you are within the non taxable limit.
Any false declaration in form 15G and 15H may lead to penalty and prosecution. So be careful before sumitting these forms and read the form carefully.
Form 15G and 15H has been modified recently.
Click here to download Form 15G and 15H.
I have seen some bank branches where a notice is pasted such as "Submit Form 15G/15H to avoid TDS". This is completely misleading. An account holder can submit Form 15G or 15H(for senior citizens who attained 60 years in anytime in the financial year) only if his total income from all sources does not exceed the threshold limit on which no tax is required to be paid. That means the total income should be non taxable, below Rs 2,50,000/- for senior citizens and Rs 2,20,000/- for others for the current financial year (2013-14).
There is no provision that you declare to the bank not to deduct tax as you undertake to settle it yourself with the authorities. The bank has to deduct tax at source unless you submit form 15G or 15H and that only if you are within the non taxable limit.
Any false declaration in form 15G and 15H may lead to penalty and prosecution. So be careful before sumitting these forms and read the form carefully.
Form 15G and 15H has been modified recently.
Click here to download Form 15G and 15H.
It is not like that. Even if the total tax liability exceeds the threshold limit of Rs 2.50 lakhs for Senior Citizens and Rs 2.20 lakhs for others, if 15 H or 15 G is submitted, banks need not deduct tax at source. This is because, TDS might have been deducted at some other payment in excess of the tax liability including the interest on deposits and the final result would be some amount of refund to the tax payer or who has submitted 15 H or 15 G. In other words, if the tax liability including FD interest is say Rs 10000 and tax has been deducted and remitted in respect of the same person out of some other payment to the extent of Rs 15000, then he would get a refund of Rs 5000 on filing his IT return. There should not be any short remittance of Income tax by the tax payer.
ReplyDeleteMr Shankar, I beg to differ. The Bank has a liability to deduct tax at source if it exceeds Rs 10000 and the account holder can not submit form 15G and 15H if his income is above the threshold limit. The assessee can apply to I.T. authority for no deduction or deduction at short rate and the dept. can allow it under section 197 of I.T. act. Then only the bank will not deduct tax at source or deduct at lower rate. In no way the assessee can submit form 15G or 15H if his income is above the marginal limit, irrespective of his deduction of tax elsewhere.
ReplyDeleteHi Mates,
ReplyDeleteNice Post and Fastidious urging ( 15G or 15H Declaration ) commented at this place,
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According to new form 15H senior citizens can file 15H if they have income upto 2,50,000/- + 1,00,000/- of 80c + other Chapter VI-A deductions and provided that person has indeed made such investments (Chapter vi-a). Please read the note #4 in the new 15H for FY 2013-14
ReplyDeleteIn new form 15H under notes section in 15H for FY 2013-14 in point 4 there is a guideline for the deductor that
ReplyDelete"The person responsible for paying the income referred to in column 21 of Part I shall not accept the declaration where the amount of income of the nature referred to in section 197A(1C) or the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the previous year in
which such income is to be included exceeds the maximum amount which is not chargeable to tax and deduction(s) under Chapter VI-A, if any, for which the
declarant is eligible."
So I concluded that Chapter Vi-A deductions like 80C, 80D etc can be applied to make Tax nil for satisfying this 15H declaration..........is this correct?
In new 15h for FY 2013-14 declaration I read: -
"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 u/s 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 21 computed in accordance with the provisions oft he Income-tax Act, 1961, for the previous year ending on
.................... relevant to the assessment year ..................will be nil."
so basically it says that "tax on my total estimated income.......will be nil"...meaning if a senior citizen makes an 80c investment of 1,00,000/- and 10,000/- of 80D (Medical policy). Then he/she can file 15H declaration to his/her bank/company where such deposits are made and total income including the interest income from such deposits is 3,60,000/- (2,50,000+1,00,000+10,000).........is this correct ?
Hello,
ReplyDeleteMadhu here.
My income falls under taxable bracket but I mistakenly submitted form 15G. Can I approach bank authorities and cancel the submitted form 15G. Will there be any penalities. Please clarify.