Self declarations by the depositor not to deduct tax on the deposit – form 15G/H

Self declarations by the depositor not to deduct tax on the deposit – form 15G/H

Form 15G-

Form 15G can be submitted by individual below the Age of 60 Years (as age of senior citizens is lowered to 60 years of age from the existing 65 years of age. The Government of India took this decision on 9^th June, 2011.)

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.

Declaration under section 197A(1) of the Income-tax Act, 1961, to be made

by an individual claiming receipt of dividend without deduction of tax

http://www.incometaxindia.gov.in/forms/15G.pdf

FORM NO.15H:

If you are a senior citizen

This form should be submitted to all the branches where you have the deposit. For example you have deposit in three SBI bank branches 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 process, good idea to submit the forms at the beginning of the assessment year.

Declaration under sub-section (1C) of section 197A of the Income -tax Act, 1961, to be made by an individual who is of the age of sixty-five years or more claiming certain receipts without deduction of tax

http://www.incometaxindia.gov.in/forms/15H.pdf

 Also understand section 206AA

Section 206AA is related to PAN details are compulsory for TDS eligible payments

as per this wef 01.04.2010 "every person who receives income on which TDS is deductible shall furnish his Pan, falling which TDS shall be deducted at the rate of 20% in case of Domestic deposits and 30.90% in case of NRO depositis"

Also note in absence of PAN details, Form 15G/H and other exemptions certificates will be invalid even if submitted and Penal TDS will be applicable.

check this complete details on section 206AA

Insertion of new section 206AA.

69. After section 206A of the Income-tax Act, the following sec­tion shall be inserted with effect from the 1st day of April, 2010, namely:—

“206AA. Requirement to furnish Permanent Account Number.—(1) Notwithstanding anything contained in any other provisions of this Act, any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB (hereafter referred to as deductee) shall furnish his Permanent Account Number to the person responsible for deducting such tax (hereaf­ter referred to as deductor), failing which tax shall be deducted at the higher of the following rates, namely:—

           (i)  at the rate specified in the relevant provision of this Act; or

          (ii)  at the rate or rates in force; or

         (iii)  at the rate of twenty per cent.

(2) No declaration under sub-section (1) or sub-section (1A) or sub-section (1C) of section 197A shall be valid unless the person furnishes his Permanent Account Number in such declaration.

(3) In case any declaration becomes invalid under sub-section (2), the deductor shall deduct the tax at source in accordance with the provisions of sub-section (1).

(4) No certificate under section 197 shall be granted unless the application made under that section contains the Permanent Ac­count Number of the applicant.

(5) The deductee shall furnish his Permanent Account Number to the deductor and both shall indicate the same in all the corre­spondence, bills, vouchers and other documents which are sent to each other.

(6) Where the Permanent Account Number provided to the deductor is invalid or does not belong to the deductee, it shall be deemed that the deductee has not furnished his Permanent Account Number to the deductor and the provisions of sub-section (1) shall apply accordingly.”.

Also refer

Submission of Form 15G or Form 15H

About TDS

TDS stands for Tax Deducted at Source. This means a part of tax required to be paid by the assessee, is deducted by the person paying income to him. Thus the tax is deducted at the source of income itself.

Individuals or HUF’s carrying on a business or profession, where their gross sales or turnover exceeds Rs. 40 lacs (in case of business) or Rs. 10 lacs (in case of profession), are liable to deduct tax at source on all specified payments except for payment of royalty or payment to contractor.

TDS has to be deducted on the following payments:

• Payment of Salary [Sec.192]

• Interest on securities ( other than exempted and Central/State Government securities [except 8% Savings Bonds,2003] to a resident [Sec. 193]

• Interests on Gold Bonds, if the value of the Bonds held during the relevant period exceed Rs. 10,000 [Sec. 193]

• Interest on listed debentures where the total exceeds Rs.2,500 p.a. [Sec.193]

• Payment of Dividends.

• Interest on deposits with housing finance companies exceeding Rs. 5,000 p.a. [Sec.194A]

• Interests on time-deposits with a banking company or a co-operative bank where the interest exceeds Rs 10,000 p.a.

• Interest on compensation awarded by the Motor Accidents Claims Tribunal where such interests exceed Rs. 50,000 p.a.

• Cash won from lotteries and crossword puzzles, card game or any other game exceeding Rs. 5000. [Sec. 194B]

• Winnings from horse races exceeding Rs. 2500 [Sec. 194BB]

• Payments credited or likely to be credited to contractors and sub-contractors by the Government, local authority, corporation, company, co-operative society, trust, university or firm, exceeding Rs. 20,000 for carrying out any work or when aggregate of such payments exceeds Rs. 50,000 in a financial year [Sec. 194C]