Indian Taxation: Use of Form 15G and Form 15H

Indian Taxation: Form 15G and Form 15H

Discussion: 1 -----  What you should know about Form 15G and Form 15H?

In this article I will be writing about the Form 15G and From 15H and purpose of submitting those forms to the bank.  Everyone aware that those forms are used for avoiding the TDS deduction while computing the interest earned during the financial year. This article gives you some important points while submiting the Form 15G and Form 15H. I have seen many people are asking the doubts on how to submit the forms and when to submit the forms. This articles will answer some of the necessary queries.

Form 15H

• You must be above 65 years of age to submit the Form 15H
• Estimated tax for the previous assessment year should be nil. That means he did not pay any tax for the previous year because his income is not coming under the taxable limit.
• This form should be submited to all the branches where you have the deposit. For example you have deposit in three SBI bank branchaes Rs.100000 each. You must submit the Form 15H to each branch.
• Submit this form before the first payment of your interest. It is not mandatory but it will avoid the TDS deduction. In case of the delay, the bank may deduct the TDS and issue TDS certificate at the end of year. You have to file the IT returns  and claim the refund from the Income Tax. To avoid these proces, good idea to submit the forms at the beginning of the assessment year.
• If the total income from the interest is above Rs.10000 incase of deposied in the banks or Rs.5000 incase of deposited in the companies like Tata Motors, Mahindra finance etc. Note that for the banks the total interest is calculated in each branch separetly.  If you have deposit in the many different branches, it will not be accumulated for the tax purpose. But, you will have to submit the details in the IT returns.
• TDS will be deducted at the rate of 10% p.a. up to 10 lacs.
• A fresh Form 15H needs to be furnished for each deposit that is placed with the Bank. For example you have many fixed deposit accounts in the same branch, you will have to submit for the each deposit.
• A consolidated TDS Certificate in Form 16A, for TDS deducted during a financial year will be issued in the month of April of the following financial year.
• Deposits held by minors are also subject to TDS. The credit for the TDS can be claimed by the person in whose hands the minor’s income is included.

Form 15G

• The above points are applicable to the Form 15G as well, except the Form 15H is only for the senior citizen. Form 15G is for everyone whose income is below the taxable limit.
• You cannot submit the Form 15G if you are already the tax payer.

Discussion: 2 ----- Forms -15G / 15H :

·         Declaration under sub-sections (1) and (1A) of section 197A of the Income-tax Act, 1961, to be made by an individual or a person (not being a company or a firm) claiming certain receipts without deduction of tax. These forms are not for income tax exemption. Form -15H : For senior citizens. Form -15G : For other individuals. You can file Form 15H is for senior citizen and 15G for any other person with the bank so that no TDS is deducted. For Dividend income (section 194) and for National Saving scheme income (section 194EE) any resident individual and for Interest income (sections 193, 194A and 194K) any person other than a company or firm (includes non-resident) can submit a declaration under section 197A so that no tax is deducted on source from such income. The recipient must meet these conditions: 

·         Tax on total income of the previous year must be nil and the Form 15H/15G covers only the maximum amount not chargable to tax.

·         Your can file Form 15H with the bank so that no TDS is deducted.