7 Important Questions About Form 15G/ 15H – Answered
Fixed Deposits are a reliable source of investment because they provide assured returns which are higher than the savings bank interest amount. However, simultaneously, they attract tax implications also.
If a person earns an interest income of more than ₹ 10,000 (₹ 40,000 proposed in the interim budget presented for FY 2019-20) in a year, the interest payer has to deduct TDS at 10 percent before paying the interest. For senior citizens, the TDS-free interest limit is ₹ 50,000.
However, if the total tax liability on the taxable income (interest income plus income from all other sources such as salary, business, capital gains, house property, and other sources minus deduction) is NIL, you can submit Form 15G/ 15H to the bank and earn TDS-free interest income.
Who can submit Form 15G?
- A resident Indian (if your age is less than 60 years), or
- A HUF
- A Trust
- Any other assessee except company or firm
Who can submit Form 15H?
A resident Indian (if your age is 60 years or more)
What are the conditions for filing Form 15/ Form 15H?
The total of all incomes on which TDS is applicable should be less than the basic exemption limit. For FY 2019-20, the basic exemption limit for taxpayers up to 60 years of age is ₹ 2,50,000, while it is ₹ 3,00,000 for senior citizens. Also, as a result, the tax liability should be NIL.
Don’t invite tax penalties by filing Form 15G/ 15H incorrectly. Consult a CA to determine if you are eligible to submit it and earn tax-free interest income.
What is the due date of submitting Form 15G/ 15H?
Although Form 15G/ 15H can be submitted anytime during a Financial Year, it is recommended that it should be ideally filed before the end of the first quarter (June 30) to avoid TDS during the entire year.
However, if it is submitted at a later stage, the payer will not deduct TDS for the following quarters.
Didn’t submit Form 15G/ 15H due to TDS got deducted? Check your Form 26AS statement to recall the total TDS deducted during the year and claim refund in ITR.
What if I realize that my income will cross the basic exemption limit?
If you have submitted Form 15G/ 15H earlier and realize later that the taxable income will cross the basic threshold limit (₹ 2,50,000/ 3,00,000 as applicable), you should inform the bank/ deductor immediately so they can start deducting TDS from the next quarter.
What will happen if I forget to submit Form 15G/ 15H?
Don’t panic, if the bank or the interest payer deducts TDS, even when the final tax is NIL. You can file the income tax return and claim back refund of the TDS amount.
Can I avail income tax rebate while calculating the threshold limit for filing Form 15H?
According to the new rules defined by CBDT, the taxpayers can avail tax rebate (given under Section 87A) while calculating their taxable income to check whether they qualify to submit Form 15H.
Hence, if your taxable income is more than ₹ 3,00,000 (basic exemption limit for the senior citizens) and the tax liability becomes zero after availing rebate under section 87A, they can submit the Form 15H to earn TDS-free interest income.
Section 87A clarifies that if the taxable income is up to ₹ 5,00,000, a taxpayer can deduct up to ₹ 12,500 from the total tax liability as a rebate.
In a nutshell, the senior citizens can submit Form 15H if their taxable income is ₹ 5,00,000 or less in a Financial Year.
How to download Form 15G/ 15H?
Most banks enable you to download Form 15G/ 15H through their website. Alternatively, you can visit www.incometaxindia.gov.in to download the PDF file of Form 15G/ 15H.
Hire an accountant online who can assist in submitting Form 15/ Form 15H in-time. An experienced professional will remind you of the due dates well in advance, so you don’t fall behind.
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