The bank is required to deduct TDS when interest for whole year on all types of deposits account exceeds Rs 10,000 in all the branches taken together with core banking, otherwise the Rs 10,000 threshold is considered for each branch. From the current year for senior citizen the limit has been raised to Rs 50000. The TDS is not applicable for saving bank interest paid to resident taxpayers. The tax is deducted by the bank every year in respect of interest accrued till March 31 in case of FD maturity date is beyond March 31 as well as paid during the year.
Can you submit form No. 15G?
Any resident person including an HUF can submit form 15G but a non resident as well as a company and partnership firm cannot submit it. You can submit form 15G if you satisfy two conditions cumulatively: Your tax liability should be nil as well as aggregate of the interest from all the sources for which you are submitting form 15G should not exceed basic exemption limit i.e. Rs 2.50 lakhs for individuals and HUFs. So in case even if you have a small tax liability on your income, technically you cannot submit this form. Such situation may arise where due to various deductions available, the tax payable on your total income may be nil but if the total interest income from all the sources exceeds Rs 2.5 lakhs, you cannot submit form 15G but the payer will deduct TDS.
Who can submit form 15H?
A senior citizen can submit form 15H if his total interest from a particular bank exceeds Rs 50,000 and has to satisfy only one condition i.e. his tax on total income is nil though the total interest may exceeds the basic exemption limits.
How the forms can be submitted?
Forms 15G and 15H can either be submitted physically or electronically through the website of the bank. While submitting the forms you need to submit photocopy of PAN card, failing which the bank will deduct tax @20% in spite of having submitted the form well in time. Please obtain acknowledgement of the form submitted for future reference.
When the bank deducts tax before you submit the form
Ideally you should submit form 15G or 15H at the beginning of year before any tax is deducted. However, if tax has already been deducted before submission of your form, you do not have any option but to claim refund for such TDS by filing the ITR as you cannot get refund for such TDS from the bank.
So, file your form 15G or 15H only if you are eligible to file the same and have it filed before the bank actually deducts any tax on it and mention your PAN correctly.
The author is a CA, CS and CFPCM