Don’t know about form 15G or 15H? Go through this article to find out about procedure and the way you can submit it.
TDS Income Tax Form 15G
You do not have to pay tax deducted at source (TDS) on your passive income like interest earned from bank deposits or rental income, which are suitable for TDS, if your total earning is less than the taxable limit. To make sure no TDS is charged on such income, you can submit Form 15G or 15H to the relevant institution.
Tax Deducted at Source (TDS)
It is the procedure of collecting tax as and when the salary is generated and it streamlines the procedure of collecting taxes for the tax department. TDS is applicable on several incomes such as interest, commission, rent, brokerage, income, royalty, professional fees, and others. It is deducted at the approved rate by the tax department if the permanent account number (PAN) is provided by the receiver of the salary or at the rate of 20% in the absence of PAN, whichever is higher. Tenants can deduct tax at 5% if the lease is more than ₹50,000 for every month, while banks charge a TDS of 10% on interest earned on deposits.
The forms 15G or 15H
15G or 15H are basically self-declaration forms to give an undertaking that your salary is below the threshold limit of income tax and therefore excused from tax. Those who are younger than 60 years then can fill the form 15G and those who are above 60 then can fill the 15H form but keep in mind that both the form needs to be submitted separately for different sources of income. When you submit the form to a bank, they will not subtract TDS from the amount payable to you in the form of interest, provided that the amount payable is less than the tax threshold.
The institution charging TDS is accountable to deposit the taxes to the income tax department and usually, banks deduct TDS on interest earnings in deposits on a quarterly basis. Once TDS is deducted and submitted to the IT department, and if you are not accountable to pay that tax, the only mode to get it back is to file your returns for the year. This would denote a significant delay in getting back the funds. For example, if your bank has deducted TDS on your interest income for the April-June quarter in July 2018, you will require filing your tax return for FY19 in 2019 and will get the reimbursement only after the return is processed.
When to submit
This delay can be avoided if you submit the necessary statement at the start of the financial year itself. Keep in mind that you need to submit this form individually for different sources of earnings. For example, if you have fixed deposits in three banks accounts, you require submit Form 15G or 15H to every bank and you will have to submit this form every year. These forms are available on the tax department’s website, incometaxindia.gov.in, and post office branches and at bank; some banks also permit you to submit these forms online.
Before you apply these forms to prevent TDS, ensure that your tax liability during the year is expected to be zero. A fine applies if the tax department finds out that the assessee is intentionally avoiding TDS to avoid taxes.If you have already submitted one of these forms, but realize later in the year that your earnings is more than what you evaluated, assess your liability on the additional income and pay tax consequently.