Tax time is not good for many, especially when it is a large sum one has to pay. At that moment, one thing that pops up in one’s mind is the ways of saving on tax. Though there are various ways of saving on tax, bank FDs is one of the tax-saving instruments you can file a declaration in form 15G/15H to the deductor for non-deduction of tax on interest. Basically, that means if you don’t come under the income tax slab, the bank will not deduct TDS on interest on FDs.
Form 15G and Form 15H are a type of self-declaration form that declares that your income is below than basic exemption limit thereby TDS should not be deducted from the interest income of FDs. So, if your total income is less than the basic exemption limit, you can request the bank not to deduct TDS on the interest of your fixed deposit using forms 15G/15H.
Only resident individual taxpayers or HUF (Hindu Undivided Family) are allowed to submit Form 15G. Resident Individuals with an age of 60 years or more i.e. Senior Citizens are allowed to submit Form 15H. Companies, firms, the non-resident persons are not allowed to use these forms. To fill both the forms, individuals must have a Permanent Account Number (PAN).
Form 15G and Form 15H can be used to avoid TDS deductions. Some of the popular uses of these forms are as follows –
Form 15G is mainly divided into two parts;
In this part, you have to give the details of your annual income along with the name, address, phone number, email, etc. Section of Income Tax Act under which there is the rule of tax deduction and the total amount to be deducted should also be mentioned in this part. After this, it has to be declared that all the details given in the form are correct. Declaring that, you have to sign on the form mentioning the date and place below.
In this part, the name of the person responsible for paying, date of payment, and payment on behalf of the payment issuer (company, institution, or individual), address, PAN number, TAN number, phone number, email ID, etc. are given. At the bottom, you have to sign mentioning the date and place.
Most banks are now offering the facility to fill in Form 15G and 15H online. For this, you must have the saving account in the same bank and your internet banking facility activated in it.
You can fill Form 15G or Form 15H through your net banking. Once you log in to your account, you have to click on the online fixed deposits tab there. On this page, you will find a link to generate Form 15G and Form 15H. Click on it, the form will open. The details given therein are to be filled in and sent to your bank.
Form 15G/15H has to be submitted separately every year to avoid TDS deductions on the interest amount of deposits. At the start of every new financial year, a new Form 15G and Form 15H have to be submitted.
While filling Form 15G or Form 15H, you should fill in all the income and tax-related information correctly. In case of the wrong declaration of your income, legal action or penalties can be imposed against you. Under section 277 of the income tax act, you can be fined or imprisoned for 3 months to 3 years if you intentionally show your income less to avoid TDS deduction. In case of tax evasion of more than 1 lakh rupees, there can be imprisonment from 6 months to 7 years.
In case of lack of attention, you may miss filling the Form 15G or 15H on time and TDS has been deducted on the payment you receive. In such a situation, you can do the followings –
In a financial year, if you think that there is a possibility of cutting TDS from your income as per the rules, immediately submit Form 15G or Form 15H. This way, you can avoid TDS deduction on the remaining quarters. Note that, most banks deduct TDS every quarter. So, even if the TDS of the first quarter has been deducted, it won’t be deducted in the subsequent quarters.
If you have paid more tax than your income tax liabilities in an FY, then file ITR to claim the refund. Note that, the financial year ends on 31 March, and the assessment year start from that. In an assessment year, income tax returns can be filed from 1 April to 31 July. If you file returns after that, the penalty may be levied by the income tax department.
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