Every person holding Deposits with Banks/Financial Institutions/Companies must have heard about these forms 15G & 15H. As a depositor, you will be required by the bankers/financial institutions/Companies to submit Form 15G/15H for non deduction of tax at source (TDS). But, how many of us really know, what this Form 15G/15H is and what are the implications of filing the same? This article is aimed at throwing some light on the facts and procedures with regard to these Forms.
What is Form 15G/15H ?
Form 15G/15H is a declaration to be filed by an Individual or a person (not being a company or a firm) for the purpose of claiming certain payments (Dividends/Interest on Securities/Interest other than interest on Securities/National Savings Scheme/Interest on Units) without the Deduction of Tax at Source (TDS).
Who can give Form 15G/15H
Form 15H shall be given by persons above 60 years of age.
Form 15G shall be given by persons below 60 years of age.
“Person” means Individual (or) a person (not being a company or a firm). Hence even HUFs and Association of Persons can also make use of these forms.
What are the other Conditions for submission of Form 15G/Form 15H
a) The income of the declarant should be below taxable limits during the previous year.
For Example for the year 2011-12, the taxable limits for various types of assessees are as follows :-
In case of resident Individuals below 60 years of age- Rs. 180000/-
In case of resident Women below 60 years of age – Rs. 190000/-
In case of resident Individuals 60 years or above age – Rs. 250000/-
In case of resident Individuals 80 years of above age – Rs. 500000/-
b) The tax on estimated total income for the previous year should be “Nil”.
c) Type of Payment and declarant
Interest on Securities – Other than Company or firm
Dividend – Resident Individual
Interest other than
Interest on Securities – Other than Company or firm
National Savings Scheme – Resident Individual
Interest on Units – Other than Company or firm
d) PAN (Permanent Account Number) is mandatory for making declaration using Form 15G & 15H w.e.f 01/04/2010.
Consequences of False/Incorrect Declaration :-
Any person making a false statement in the declaration shall be liable to prosecution under section 277 of the Income-tax Act, 1961, and on conviction be punishable –
(i) in a case where tax sought to be evaded exceeds one lakh rupees, with rigorous imprisonment which shall not be less than six months but which may extend to seven years and with fine;
(ii) in any other case, with rigorous imprisonment which shall not be less than three months but which may extend to three years and with fine.
Myths & Facts about Form 15G & Form 15H
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Sl. No.
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Myth |
Fact |
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1 |
Anybody who wishes to avoid tax deduction can make use of Form 15G/15H | Only persons with income below taxable limits and Nil Tax liability can only make use of this form. |
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2 |
Once declaration is given in Form 15G/Form 15H, there is no need to declare this income in return of Income. | Irrespective of the fact whether the Form is used or not, the respective income should be compulsorily declared in return of income. |
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3 |
Once declaration is given in Form 15G/Form 15H, there is no need to pay tax on the same. | As per the provisions, only persons with NIL tax liability only can give these forms. But if there is a tax liability, they have to necessarily pay the requisite tax. On the other hand, by payment of tax they run the risk of giving a wrong declaration. Hence before giving Form 15G/15H, please be doubly careful. |
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4 |
Form 15G & 15H are submitted only to the banks/Financial Institutions/Payer. | This is partly correct. The person who receives the Form 15G/15H is required to submit one copy of the Form to the Commissioner of Income-tax . Hence the information is passed on the Income-tax department and the Income-tax Department can make further enquiries on the same. |
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5 |
Submission of Form 15G/15H once is sufficient. | No. These forms shall be submitted every Financial year at the beginning of the Financial year. |
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6 |
It is enough that irrespective of the fact that deposits are held in different branches, a single Form is sufficient. | No. These forms should be submitted to each and every branch where you hold the deposits. For example, if you hold deposits in 3 different branches of State Bank ofIndia, this declaration shall be given for each branch separately. |
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7 |
Since my Income is below taxable limits and tax is NIL , I do not have to submit the PAN details with the declaration | No. Every person giving declaration using Form 15G/15H shall compulsorily provide the PAN details along with the declaration irrespective of their Income/Tax status. Otherwise tax will be deducted @ 20% on the Interest (w.e.f 01/04/2010) |
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8 |
Form 15G/15H can be used for not deducting TDS for all types of payments (viz.,) Contract payments, Professional fees, rent,etc., | These forms can be used only for payments in the nature of Interest of Securities, Dividend, Interest other than Interest on Securities (Bank/Company Deposits) , NSS & Interest on Units. For other types of payments, these forms cannot be used. |
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SIR,
IF ONE IS ABOVE 60 YEARS OF AGE AND HIS/HER INTEREST INCOME IS Rs. 340000/- AND HE/SHE WILL READY TO INVEST Rs. 100000/- UNDER SECTION 80C OF IT ACT NOW TAXABLE INTEREST INCOME BECOME 240000/- CAN HE/SHE USE FORM 15H?
REGARDS,
KAMINKUMAR PANDAV