Individuals with their total income below the taxable limit can submit Form 15H and Form 15G to the bank and ask them to not deduct TDS on the number of interest. These forms help claim receipts without any tax write-off

The banks in India need to deduct TDS when the interest income of a personal is above Rs.10,000 a year. The bank includes deposits held altogether branches to work out this limit. In case an individual’s total income is below the taxable limit, he/she can submit a Form 15G and Form 15H to the bank to request them to not deduct TDS on the interest amount.

Form 15H

Form 15H may be a declaration under sub-section (1C) of section 197A of the excise duty Act, 1961, to be made by a personal of the age of 65 years or more to say certain receipts without deduction of tax. The qualified criteria to submit this declaration is listed below:

  • Form 15H can only be submitted by a person who have attained at the age of 65 years at the time of submission. (The regulation has been reduced to 60 from 1st July, 2012).
  • The income tax for the previous year should be zero. The individual shouldn’t have paid tax within the previous year because his/her income should be below the taxable amount.
  • The individual should submit this form or any other deductors to whom a loan was advanced, i.e., this type will have to be submitted to every bank branch through which the individual is collecting interest.
  • Form 15H should be submitted to the bank before the payment of the primary interest. This is not compulsory, but it’ll prevent the bank from deducting the TDS.
  • Form 15H will have to be submitted to the banks if the interest from one branch exceeds Rs.10,000 a year.
  • Form 15H have to be submitted if the interest income from any source aside from a deposit, such as, interest on a loan, advance, debentures, bonds, etc. exceeds Rs.5,000 annually.

Form 15G

Form 15G had to be declaration under sub-sections (1) and (1A) of section 197A of the tax Act of 1961, to be made by a personal (not being an organization or firm) request certain receipts without the deduction of tax. The eligibility criteria to submit this form has been listed below:

  • Form 15G are often submitted by individuals below the age of 65 years or by a Hindu Undivided Family (HUF).
  • Form 15G should be submitted before the primary payment of interest on a fixed deposit.
  • The individual should submit this type to all or any other deductors to whom a loan was advanced, i.e., this type will have to be submitted to every bank branch through which the individual is collecting interest.
  • This form can only be submitted by a person whose tax payable on their total income is zero(0).
  • The individual should be a resident Indian.
  • The total interest income is a smaller amount than the minimum exemption amount for that year. The minimum exemption amount for the year 2015-2016 is Rs.2,50,000.

Purposes for submitting Form 15G/15H

Form 15G and Form 15H are usually submitted to banks to avoid the deduction of TDS on interest, these forms also can be submitted for some other reasons:

  • TDS for EPF withdrawal.There is a deduction of TDS on EPF if a person withdraws their EPF before completion of 5 years of continuous service. If a person has an EPF balance of more the Rs.50,000 and needs to withdraw it before completion of 5 years of continuous service, he/she may submit a Form 15G/15H.
  • TDS on income developed for the corporate bonds. A person is eligible for a deduction of TDS from corporate bonds if the income generated from them exceeds Rs.5,000.
  • TDS on income from post office deposits.Digitized post offices also conduct TDS and can accept Form 15G/15H if the individual meet the eligibility criteria.
  • TDS on rent.There is a deduction of TDS on rent if the overall rental payment for a year exceeds Rs.1.8 lakhs. If a person or an individual total income is nil, he/she can submit Form 15G/15H to request the tenant to not deduct TDS.

Things to keep in mind

  • An individual can only submit Form 15G/15H to a bank with a legitimate PAN, failing which, tax are going to be deducted @ 20%. It is advisable to submit a copy of the PAN card with the cover letter.
  • The individual should confirm he/she receives an acknowledgment while submitting Form 15G/15H. Acknowledgment of submission of PAN details are useful if a conflict with the bank arises.
  • As per the updated form, the individual will have to submit the details of the shape 15G/15H submitted by him/her to other banks also because the interest income amount mentioned in these forms.
  • As the individual has submitted his/her PAN, the respective assessing officer will have access to all or any other the data submitted by the individual to other banks and can be ready to detect any incorrect information submitted by the individual.
  • Indian law features a provision for imprisonment for a minimum of three months if a person is found to own provided misinformation in these declaration forms.

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