6/2/2014 Know the do' s and don' ts of forms 15G and 15H - Moneycontrol.

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Jan 21, 2014, 04.17 PM IST | Source: Moneycontrol.com
BALWANT JAIN
CFO, Apnapaisa.com
Expertise : Tax
More about the Expert...
1
Balwant Jain
Apnapaisa.com
Off late I have been receiving many queries from the readers about submission of forms to the banks so as
to ensure that the bank does not deduct tax at source.
In order to address those queries I have decided to write this article about form No. 15G and 15H which
banks normally ask depositors to fill in and file. There are different rules as to who can submit form no. 15G
and who can submit form no. 15H. There are certain precautions one should take while submitting these
forms.
When can the bank deduct tax at source?
Before I explain as to who can submit form no. 15 G and who can submit 15 H, let us first understand when
bank deducts tax on the interest payable. The bank will deduct tax at source once the amount of interest to
be credited in respect of all the fixed deposits taken together exceeds Rs. 10,000 in a financial year.
This limit of Rs. 10,000 is applicable for each branch of a bank and not for all the branches of a bank taken
together. So each branch of the bank will see whether the interest for the whole year on all the FDs exceed
the threshold of Rs. 10,000.
One interesting point to be noted here, which many people are not aware, is that banks are not required to
deduct any TDS on interest credited on your savings bank account even the amount of interest may be very
substantial.
Please note that in case of fixed deposits made for longer duration where the interest will be paid to you
only on maturity, the bank will deduct tax at source on the interest accrued for the year even though no
interest in fact has been paid to you.
Who can submit form No. 15G?
First and foremost only a person who is resident in India can submit form No. 15G. So an NRI cannot
submit this form. Any person other than a Company can submit form No. 15 G. So any Individual and HUF
can submit form No. 15G.
Know the do's and don'ts of forms 15G
and 15H
Balwant Jain of apnapaisa.com elaborates on the dos and donts of Form 15G and Form
15H.
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6/2/2014 Know the do' s and don' ts of forms 15G and 15H - Moneycontrol.com
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However it is not that every Individual or HUF can submit form No. 15G. Only the individual 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, can submit this form.
So for being eligible for you to submit this form, you need to satisfy both the above conditions. In a situation
where due to various deductions the tax payable on total income may be nil but if the total amount of
interest income is expected to exceed Rs. 2 lacs you cannot submit this form.
Who can submit form No. 15H?
Any resident Individual who is above sixty years of age or completes sixty years during the financial year
can submit form No. 15H provided his tax liability on the basis of his estimated income 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. So only senior citizens can submit this form.
What precautions to be taken while submitting form no. 15G and 15H?
Please ensure to submit your PAN details to the bank while submitting the form No. 15G or 15 H. In case
you fail to provide your PAN number to the bank, the bank will deduct TDS @ 20 percent against the
applicable rate of 10 percent even if you have submitted form no. 15G and 15H.
I would advise you to submit a copy of your PAN card by way of separate letter and obtain written
acknowledgement for the same.
Please obtain acknowledgement for form no. 15 G or 15H while submitting it. So it is advisable to get the
form submitted personally rather than sending it through post so as to ensure proper acknowledgement
What if the bank has already deducted tax before submission of the form?
The form no. 15G or 15H as the case may be, should be submitted at the beginning of the year so as to
avoid a situation where bank has already deducted the tax before you submit the form. However in case the
bank deducts the tax in spite of you having submitted the form or before you actually submit the same, the
bank will not refund the tax already deducted, as the bank would have already deposited the tax with the
government. In such a situation the only option available with you is to file your income tax return and claim
the amount of TDS a refund.
I hope that from the above discussion it becomes clear that you need to comply certain conditions to be
eligible for filing form No. 15G or 15H. Moreover you need to take certain precautions while filing these forms
with the bank.
Apnapaisa is India's online marketplace for loans & investments .
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