This
being the first quarter of the financial year, it is important, for all
the people who want to receive interest without deduction of tax, to
submit form no. 15G and 15G immediately to the banks. Recently
rules/procedure related to particulars to be furnished and how to
furnish these forms have been substantially amended. Let us discuss as
to who can submit form no. 15G and 15H and the precautions to be taken
while filing these forms.
When the bank will deduct TDS
The bank is required to deduct tax at source
when interest on fixed deposits as well recurring deposits taken
together exceeds Rs. 10,000/- in a financial year, for all the branches
of the bank taken together, for the bank with core banking, otherwise
the threshold of Rs. 10,000/- is to be calculated for each branch.
Please note while determining the threshold of Rs. 10,000/- interest on
your saving bank account shall not be taken into account.
There is an impression in the minds of people
that fixed deposit with tenure of more than one year, the tax is
deducted only at the time of maturity of the FD, i.e. at the time of
payment payment of the interest. This is not so. The bank calculates
interest for the period ended on 31st
March and deduct tax, in case interest is more than 10,000/- for a
year. So please bear this in mind otherwise you will be shocked when
lower maturity amount is credited due to the tax having already been
deducted in earlier years.
Can you submit form No. 15G?
Any person other than a company and a
partnership firm can submit form No. 15 G. So even an HUF can submit
form No. 15 G. Only a resident individual
(Below the Age of 60 Years) can submit the form no. 15G so an NRI
cannot submit this form. For being eligible to submit form No. 15G you
need to satisfy two conditions together. Firstly your tax liability
calculated on your total income should be nil and the total of the
aggregate of your income for which form 15 G can be submitted should not
exceed the basic exemption limit of Rs. 2.50 lacs.
So even if there is very small tax liability
as compared to the amount of TDS which will be deducted by the bank on
your interest, still you cannot submit the form no. 15G. It is
irrelevant whether any other tax has been deducted or you are willing to
pay any tax yourself. Situation may arise where due to various
deductions available, the tax payable on your total income may be nil
but if the total amount of such income is expected to exceed Rs. 2.50
lacs, you cannot submit form No. 15G.
Who can submit form No. 15H?
A tax payer who has completed 60 years of age
can submit form No. 15 H but needs to satisfy only one condition that
tax liability on total income is nil. The quantum of interest income
being received by you is not relevant.
How the forms can be submitted:
As per the revised rules forms 15G and 15H can
either be submitted in physical mode or can be submitted in electronic
form through the website of the bank. Though these forms can be
submitted electronically all the banks are not yet ready with online
functionality for submission of these forms. I would advise you not to
wait for the online facility becoming available and file your physical
Form 15G or 15H immediately.
Care to be taken while submitting form no. 15G and 15H?
Your form will not be accepted by the bank
unless you submit a valid PAN, failing which the bank will deduct tax @
20 percent. It is advisable to submit copy of your PAN card with a
covering letter. Please obtain acknowledgement while submitting it. So
it is advisable to get the form submitted personally and obtain
acknowledgement rather than sending it through post. Acknowledgement of
submission of PAN details will come handy in case of any dispute with
the bank.
As per the revised form you have to submit the
details of form 15 G or 15H submitted to other banks as well as the
total of interest income comprised in such forms, any incorrect details
in the form will be immediately detected by the deductor. Since you are
submitting your PAN, the assessing officer having jurisdiction over you
will have online access to all the details of the forms submitted to
various banks and thus will be in a position to find out any incorrect
information submitted.
Please note the law provides that in case you
made any false statement there is provision for imprisonment for a
minimum period of three months for such misstatement. So I would advise
you not to play any such trick.
What can you do if the bank has already deducted tax before you submit the form?
Ideally the form no. 15G or 15H 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 tax has already been deducted by the bank before you submit
the form or even in spite of having submitted the form, you can not get
refund for such tax from the bank for the tax so deducted. The only
recourse available to you is to claim refund by filing your income tax
return after collecting the form No. 16 A from the bank.
So to conclude please file your form No. 15 G
or 15H only if you are eligible to file the same and have it filed
before the bank actually deducts any tax on it and mention your PAN
correctly.
The author is a CA, CS and CFPCM. Presently
working as Company Secretary of Bombay Oxygen Corporation Limited. Views
are personal., He can be reached at jainbalwant@gmail.com and @jainbalwant
Source: Taxguru
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