Under Income Tax Act Section 194A, banks are required to charge TDS when your income from interest exceeds 40,000 INR in a particular year for anybody apart from senior citizens (the maximum for whom is 50,000 INR). This limitation is calculated by aggregating the interest on fixed deposits maintained in all of the bank’s branches Form 15G.
But, if your overall income is less than the taxable limitation, you can submit Form 15G to your banking institution and demand that no TDS be deducted. This article will provide you with a walkthrough of the procedure and everything you need to know about the documents.
What is Form 15G?
Form 15G can be defined as a self-declaration document that may be made to a banking institution by an individual residing in India (who is not a corporation, firm, or a cooperative society) for TDS non-deduction from the interest earned on Term Deposits with the bank. It includes Cash Deposit, Fixed Certificate, and Recurring Deposit. This document can only be made if the projected earnings from all streams are equal to or less than the baseline exemption level indicated in the Income Tax Department’s regulations. For the consumer to submit Form 15G, a valid PAN is required.
Eligibility requirements for filing Form 15G:
- The applicant needs to be an individual who is not a corporation or a partnership.
- The applicant needs to be an Indian resident throughout the appropriate fiscal year.
- The age of the applicant needs to be 60 years old or younger.
- The applicant’s tax due based on overall taxable income for that particular fiscal year needs to be nil.
- The total amount of interest income earned by the applicant throughout the fiscal year needs to be less than the base exemption level.
Features for filing Form 15G:
- IT Act Section 197A contains rules about Form 15G.
- In 2015, the structure of Form 15G was significantly altered to reduce the compliance load and costs borne by both the tax deducted and the deductor.
- CBDT introduced the present version of Form 15G.
- Persons under the age limit of 60 years can fill out Form 15G. Anyone above the age of 60 years is considered a senior citizen.
When does Form 15G need to be filed?
Form 15G is only valid for one fiscal year. As a result, please complete these documents at the start of each fiscal year. This will prevent the bank from deducting TDS on your income from interests. Owing to the expansion of the new wave of COVID-19 in the financial year 2020-21, the government postponed the expiration of Form 15G from 31st March to 30th June
How to file Form 15G?
Form 15G is divided into two sections. The first section is for those who wish to seek no-deduction on TDS. Below are the crucial details you must include in the first section of Form 15G:
- Name as it appears on your valid PAN card
- A verified PAN card is required for submitting Form 15G. If you do not provide proper PAN information, your claim will be deemed void.
- Form 15G can only be submitted by people, not by firms or corporations.
- The prior fiscal year should be chosen as the one for which the applicant is seeking TDS non-deduction.
- Specify your residency category as an Indian resident individual, as NRIs are not permitted to file Form 15G.
- Specify your address and PIN code accurately.
- Provide a functional email address and phone number for future correspondence.
- If the applicant were able to obtain the tax under the terms of the 1961 IT Act for any prior assessment year, tick “Yes.”
- Specify the most recent fiscal year for which the returns were evaluated.
- Details about the expected income for which the applicant is declaring should be included. The term “estimated income” refers to the overall income for the fiscal year.
- If you filed Form 15G at any point throughout the fiscal year, the specifics, as well as the total income amount, must be included in the current declaration.
- The final portion of Section 1 discusses the investment specifics for which the applicant is submitting a declaration. You must provide your investment account number, which might be anything from a term deposit to a life insurance policy id/employee code.
- After you’ve finished filling out all of the fields, double-check everything to make sure there aren’t any mistakes.
The TDS deductor, or the individual who will deposit the TDS to the Indian government, must complete the second section of Form 15G.
Conclusion:
Finally, if your total income is lower than the taxable limitation, you can send your Form 15G to the appropriate bank and request that no tax deducted at the source be taken. However, you must understand that falsifying Form 15G details in order to avoid tax deducted on the source can result in a penalty and even jail under 1961 IT Act Section 277. The punishment includes imprisonment between 3 months to 7 years depending on the amount of desired tax evasion. As a result, rather than making a dishonest declaration, you should only consider filing Form 15G if you are legally qualified.