TDS is required to be deducted u/s 194A @ 10% on interest other than interest on securities. If PAN is not submitted then tax is to be deducted @ 20%. Therefore, banks are also required to deduct TDS on interest payable on deposits if the interest amount exceeds Rs. 10,000 in a financial year.
In order to relieve assesses who are not liable to income tax as their income doesn’t exceed the basic exemption limit, form no. 15G and 15H are introduced.
Form 15G/15H can also be filed for TDS on rent under section 194I from financial year 2016-17.
Form No. 15G/15H is a declaration form in which the assessee declares that his/her income is less than the basic exemption limit.
- Form 15G can be submitted by resident individual or HUF or any person other than company or firm.
- Form 15G can be submitted only when the tax on estimated income for the year is nil and amount of interest and other income from all sources doesn’t exceed the basic exemption limit.
- Form 15H can be submitted only by resident individual who is above 60 years of age or completes 60 years during the financial year
- Form 15H can be submitted only when the tax on estimated income for the year is nil
- Although Form 15H can be submitted when the total income from all sources exceeds the basic exemption limit.
- If you have submitted form 15G/15H, it doesn’t means that you don’t need to submit PAN to the deductor, if you will not submit PAN then TDS is to be deducted @ 20%.
- These forms have a validity of one financial year. Therefore they are to be resubmitted in every financial years.
- If the TDS has already been deducted before submitting of form, then the only way is to file the I.T return and claim such TDS in it.
- Also it is advised to take a written acknowledgement of submitting such form to avoid inconvenience.
- These forms are available at the bank counters or they may be downloaded from income tax website from below links
- The payer of income is required to submit one copy of such forms to the Commissioner of Income tax on or before 7th of next month in which the form is submitted to him. Circular no. 351, dated 26th nov, 1982.
Submitting Form 15G/15H online
Now a person need not fill the form manually, online facility for filing form 15g/h is now available. You just need to login in to your net banking account, download the pre-filled form, take a printout and submit it in your bank after signing.
Penalty for Filing Form 15G/15H if you are not eligible
A false or wrong declaration in Form 15G/15H attracts penalty under Section 277 of the Income Tax Act. Prosecution includes imprisonment which may range from three months to two years along with fine. The term can be extended up to seven years and with fine, where tax sought to be evaded exceeds 25 lakh.
In a case where at the beginning of year you submit 15G/15H because you meets the specified criteria and afterwards you gets unexpected income and thus not fall within specified criteria then you needs to submit a 15G/15H withdrawal application and the bank has to deduct TDS on next payment to your account.