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2017

All You need to know about Forms 15H and 15G for Preventing TDS Deduction

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“The hardest thing in the world to understand is the Income Tax.”- This quote has come from an all-time great scientist and genius Albert Einstein. Indeed, taxation laws are highly complex. Entrepreneurs, traders, and individuals often get baffled in computing tax on their income. One of our taxable incomes is interest on FD or any investment.

Banks, by rule, have to deduct TDS (Tax Deducted at Source) when your interest income is more than INR 10000 a year. The bank includes all your deposits, from all the branches, to calculate this income. But what if our total income is below the taxable limit? The government has given the provision to request banks not to deduct any TDS on interest if our income is not taxable. Forms 15G and 15H are used for this purpose.

Let’s know more about these forms below:
Forms 15G and 15H can make your interest-based income tax-free if you meet the following conditions. All you need to have a PAN (Permanent Accountant Number) before applying through these forms. A few banks also provide the online form submission facility for these forms, and you can submit the form through the bank’s website.

Senior citizens can avail the benefit of not deducting TDS with the help of Form 15H, while others can use 15G for this purpose.

Both Form 15G and Form 15H are valid for one financial year, and if eligible, people have to submit these forms every year to inform the bank not to cut TDS. Furthermore, these forms should be submitted as the financial year starts to make sure that the bank does not deduct any tax on the income earned through interest.

Important conditions to be fulfilled before submitting Form 15G:

  1. Only an individual or HUF (Hindu Undivided Family) can submit this form
  2. Only Resident Indian can apply for this concession
  3. An applicant should be less than 60 years old
  4. The applicant has nil taxable income
  5. The total interest income for the year is less than the minimum exemption limit for that particular year. For example, if we talk about the financial year 2016-17, then the limit is INR 2,50,000

Important conditions to be fulfilled before submitting Form 15H:

  1. Only an individual can submit
  2. The applicant must be a Resident Indian
  3. The applicant should be either 60 years old (senior citizen) or will be 60 years old during the year of form submission
  4. The applicant has nil taxable income

Many individuals forget to submit Form 15G and Form 15H every year. In this situation, the bank will deduct the TDS as per the rule. However, one can get the deducted amount back by the following methods:

File income tax return- Yes, this is the only way to get a refund of TDS deducted by the bank or any other deductors. You may surprise to know that an IT return can also give TDS back! Banks or other deductors deposit the deducted TDS to the income tax department, and therefore, the income tax department can refund the TDS after filing an IT return.

Submit the relevant form immediately- Usually, TDS is deducted on a quarterly basis. If applicants forgot to submit either form on time, they can submit it at the earliest for avoiding TDS being deducted for the remaining fiscal year.

Apart from giving TDS exemption on income of FD interest, Form 15G or 15H also serve the purposes like exemption on TDS on EPF withdrawal, income from corporate bonds, post office deposits, rent, and insurance commission after fulfilling the given conditions.

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