WHEN TO SUBMIT FORM 15G / 15H ?
TDS ON BANK DEPOSIT INTEREST :
A bank or post office will deduct tax at source ( TDS ) once the amount of interest to be credited in respect of all the fixed deposits taken together exceeds Rs. 40,000 in a financial year. The limit is Rs 50,000 for the senior citizens .
As per section 194A. Banks paying interest on deposits have to deduct income-tax thereon at the rates in force at the time of credit of such interest to the account of the payee or at the time of payment .
TDS Rate prescribed for the FY 2023-24 is 10 % for the customers with PAN NUMBERS and 20% for the depositors who don't quote PAN Numbers .
When a Bank need not collect TDS on interest paid by them to their depositors ?
No deduction to be made in certain cases as per section 197a of income Tax Act : 197A. section says " No deduction of tax shall be made under any of the said section 194 , a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.
No deduction of tax shall be made in the case of an individual resident in India, who is of the age of sixty years or more at any time during the previous year, if such individual furnishes to the Bank a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.
Thus Form 15G / 15H , which are prescribed forms under the act are to be presented if a person wants to avoid TDS from the deposit interest paid .
WHAT IS FORM 15G AND FORM 15H ?
FORM 15G is the declaration that a Bank Deposit holder can submit to the banker if he/ she want exemption from Tax Deduction at Source ( TDS ) on the interest paid on the deposits .
A resident senior citizen who is above sixty years of age or completes sixty years during the financial year can submit form No. 15H , in lieu of FORM 15G .
Who is eligible to submit Form 15G
A resident person or HUF , whose tax on the estimated income for the year is nil and the amount of interest income from all the sources does not exceed the minimum exemption limit ( presently Rs 2,50,000/- ), can submit the Form.15G . Please note that both conditions are to be fulfilled to become eligible to submit the form 15G.
Form 15G download PDF
DOWNLOAD FORM 15G from the website of income tax department
WHO IS ELIGIBLE TO SUBMIT FORM 15H ?
Who can submit form No. 15H?
A resident senior citizen who is above sixty years of age or completes sixty years during the financial year can submit form No. 15H provided his estimated tax liability is nil for the financial year though the total amount of interest from all sources may exceed Rs. 2.50 lacs, the minimum amount liable for tax.
Form 15H Download PDF
PENALTY FOR WRONG SUBMISSION OF FORM 15G & FORM 15H :
Any wrong or false / wrong declaration attracts penalty under section 277 . A person can be prosecuted and can be liable for 3 months to 7 years of imprisonment for such false declarations . Hence please check your eligibility before submitting the forms .
Section 277 of income Tax Act says
" If a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable,-- (i) in a case where the amount of tax, which would have been evaded if the statement or account had been accepted as true, exceeds twenty-five hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;
(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to two years and with fine. "