Budget 2024 Update
FM Nirmala Sitharaman has made two announcements for those opting for the new tax regime.
First, the standard deduction for salaried employees is proposed to be increased from Rs 50,000/- to Rs 75,000/-. Similarly, deduction on family pension for pensioners is proposed to be enhanced from Rs 15,000/- to Rs 25,000/-.
Second, in the new tax regime, the tax rate structure is proposed to be revised, as follows:
- 0-3 lakh rupees - NIL tax
- 3-7 lakh rupees - 5% tax
- 7-10 lakh rupees - 10% tax
- 10-12 lakh rupees - 15% tax
- 12-15 lakh rupees - 20% tax
- Above 15 lakh rupees - 30% tax
As a result of these changes, a salaried employee in the new tax regime stands to save up to Rs 17,500/- in income tax.
Form 15G and 15H are self-declaration forms to be filed and submitted by individuals to ensure that the banks or financial institutions do not deduct TDS on the interest income earned/accrued in a financial year as their estimated total income will be below the basic exemption limit (i.e., ₹2,50,000 or ₹3,00,000 or ₹5,00,000, as applicable) and there is no tax liability in that particular year.
In the case of non-senior citizens, interest income should also be below the basic exemption limit to fill the Form 15G despite no tax liability on the total estimated income.
As per the provision of the Income Tax Act, financial institutions and other organizations must deduct TDS while crediting interest income to the account of the person, and the amount exceeds INR 40,000 and INR 50,000 in the case of senior citizens. Normally, people have a myth that interest on fixed deposits is calculated at maturity. Instead, it is calculated, and TDS on interest on the same is deducted periodically, which reflects in your Form 26AS.
Form 15G and Form 15H are valid for one financial year. Ensure you submit these forms every year at the beginning of the financial year. This way, you can avoid the TDS deduction by the bank or any institution that is liable to deduct TDS from your interest income.
Forms can be submitted by -
- Any Resident Individual (below 60 years of age)or HUF or trust or any person (other than company or firm)
- Having interest income from FD below the basic exemption limits of Rs 2.5 lakhs and
- No final tax liability
- Anyone having a valid PAN can submit the Form 15G.
- Any resident Individual aged 60 years or above, namely, Resident Senior Citizens
- Having any Interest Income.
- The final tax liability should be NIL
- And Must have a valid PAN
Banks or public financial institutions, while crediting the periodic interest in your account, deduct TDS on term deposit interest income.One can avoid deduction of TDS on such interest income if his/her total income is below basic exemption limit and there is no final tax liability in that particular financial year.
Filing Form 15G or 15H helps an individual declare that his/her income during the FY is less than the basic exemption limit and ensures that there is no deduction of TDS from his/her income.
Note: Banks and financial institutions deduct no TDS on saving bank accounts.
You might be tangled between the applicability and effectiveness of both of these forms, how to fill forms 15G and 15H, their uses, etc. Both forms are similar yet distinguished in the following ways
|
Form 15G |
Form 15H |
| Applicable on |
Form 15G can be submitted by any person (other than a company or firm) |
Form 15H can be submitted only by resident Individuals |
| Age Limit |
Applies to residents below 60 years of age |
This applies to resident senior citizens ( aged 60 years and above ) |
| Interest Income shall fall below the basic exemption limit |
Interest income shall be below the basic exemption limit and not chargeable to tax |
Interest income may or may not be below the basic exemption limit and not chargeable to tax |
| Provision under the Income Tax Act |
As per Section 197A (1) and (1A) |
As per Section 197A (1C) |
|
Mr. Aditya |
Mr Shekhar |
Mrs. Bhalla |
| Aged |
45 |
55 |
65 |
| Salary Income |
2,00,000 |
1,00,000 |
1,00,000 |
| Income from Interest on various Fixed deposits |
60,000 |
2,80,000 |
2,70,000 |
| Gross Total Income |
2,60,000 |
3,80,000 |
3,70,000 |
| Deductions under chapter-VI-A like u/s 80C etc |
1,20,000 |
1,50,000 |
150000 |
| Taxable income after Chapter VI -A deductions |
1,40,000 |
2,30,000 |
220000 |
| Basic exemption Limit |
2,50,000 |
2,50,000 |
3,00,000 |
| Net taxable income i.e Taxable Income |
NIL |
NIL |
NIL |
| Applicability of Form 15G |
YES |
NO |
NO |
| Reasons |
Form 15G is applicable because
a. Mr. Aditya is not a senior citizen
b. He Has interest income below the taxable limit
c. His final Tax Liability is NIL
|
Form 15G is NOT applicable because
Although his tax liability is NIL, interest income exceeds the basic exemption limit.
|
Form 15G is NOT applicable because
Mrs Bhalla is a senior citizen, and in this case, Form 15H shall apply
|
|
Mr Sharma |
Mr Verma |
Mrs Chopra |
| Aged |
65 |
75 |
55 |
| Salary/ Pension Income |
1,50,000 |
1,00,000 |
2,00,000 |
| Income from Interest on various Fixed deposits |
2,80,000 |
3,20,000 |
1,20,000 |
| Gross Total Income |
4,30,000 |
4,20,000 |
3,20,000 |
| Deductions under chapter-VI-A like u/s 80C etc |
1,50,000 |
1,50,000 |
1,50,000 |
| Taxable income after Chapter VI -A deductions |
2,80,000 |
2,70,000 |
1,70,000 |
| Basic exemption Limit |
3,00,000 |
3,00,000 |
2,50,000 |
| Net taxable income i.e. Taxable Income - Basic Exemption Limit |
NIL |
NIL |
NIL |
| Applicability of Form 15H |
YES |
YES |
NO |
| Reasons |
Form 15H is applicable because
a. Mr Verma is a senior citizen
b. His final tax liability is NIL
|
Form 15H is applicable because
a. Mr. Sharma is a senior citizen,
b. His final tax liability is NIL
|
Form 15H is NOT applicable because
Mrs Chopra is NOT a senior citizen, and in this case, Form 15G shall apply
|
Note: For Form 15H, we need not check whether the interest income falls below the threshold limit ( maximum amount not chargeable to tax) or not.
Form 15G:
Form 15 G is filled by resident individuals whose age is below 60 years during the financial year as mentioned in Form 15G is submitted when an individual expects to earn interest income exceeding ₹40,000 and, for senior citizens, ₹50,000 during that financial year and wants to request exemption from TDS on that income.
Form 15H
Form 15H is submitted solely for senior citizens, i.e., individuals who are at least 60 years of age. Eligible individuals wanting to claim exemption from TDS deductions on FDR interest income. Individual Senior citizens need to submit it every financial year to avoid a TDS deduction.
- Download the Form 15G from the EPFO website or from any other reliable source.
- Fill in the details in the form carefully. Make sure to enter your correct PAN number and annual income.
- Sign the form in the presence of a witness.
- Attach a copy of your PAN card with the form.
- Submit the form to your EPFO office along with your PF withdrawal request.
Remember to keep a copy of the filled Form 15G for your records.
- Name of Assessee (Declarant): Fill in your name and PAN number as per your PAN card.
- Status: Fill in whether you are an individual or a HUF.
- Previous Year: Fill in the current financial year you are filling out the form.
- Residential Status: You can only fill out this form if you are an Indian resident.
- Contact Details: Fill in your current address, email, telephone, and mobile number.
- Whether assessed to tax under the Income Tax Act, 1961?: If in any of the past 6 years your income has been above the taxable limit, then fill in “yes.”
- If yes, the latest assessment year you assessed: Fill in the latest year in which your income was above the taxable limit.
- Estimated income for which declaration is made: Fill in the total income (including interest income) on which TDS is not to be deducted.
-
Estimated total income of the previous year (PY) in which income is mentioned in row 16 to be included: Calculate your total income from all sources, salary, stipend, interest income, or any other income you earned during the year.
Note: Include the income mentioned in row 16 below.
- Details of all forms filled other than Form 15H during the previous year: Please provide the exact number of forms you have filled and the total income pertaining to which the declaration is being filed
- The aggregate amount of income for which Form 15H was filed: Fill in the total income for which you filed Form 15G during the previous year.
- Details of income for which declaration is filed: Fill in the identification number of relevant investment/account etc., nature of income, and Section under which tax is deductible, also fill in the fixed deposit account number, recurring deposit details, details of NSCs, life insurance policy number, etc.
-
Signature of the Declarant: Sign the form in your individual capacity.
Note: Do not submit Form 15H if income has to be clubbed with another person's income
Interest Income
To prevent banks and financial institutions from deducting TDS on interest income.
Premature EPF Withdrawals
Any amount withdrawn, ₹50,000 or more, within 5 years from the account's opening is liable for TDS. However, compliance can be avoided by furnishing Form 15G/H subject to fulfillment of conditions.
On Rental income
If rental income is more than Rs 2,40,000/- during the year and resultantly tax is deductible, you may file Form 15G or Form 15H as per the applicability.
Insurance Commission
Any insurance agent earning a commission exceeding Rs 15,000 is liable to TDS and can validly file these forms.
Income from corporate bonds
TDS is deducted on income from corporate bonds exceeding Rs 5,000. Form 15G or Form 15H can be submitted to the issuer requesting a non-deduction of such TDS amount.
Post office deposits
Digitalised post offices also deduct TDS based on specified conditions. Form 15G or Form 15H can be submitted requesting for non-deduction of any TDS amount applicable.
Dividends
If the dividend income exceeds Rs. 5000, then TDS is required to be deducted.Form-15G/Form-15H can be submitted for non/lower deduction of TDS.
Proceeds of life insurance policy
If such proceeds other than those u/s 10(10D) exceed ₹1,00,000 in an FY, then the payer is required to deduct TDS @ 5%. The taxpayer can file Form-15G/Form 15H, as applicable, to avoid or for a lower deduction of TDS.
Form-15G/15H can not be submitted if the total interest income for the year exceeds the basic exemption limit. The Income Tax Act states that Form 15G/15H can be issued to those who estimate their total income on which tax is zero and total income comes after considering deductions and allowances.
Steps to submit Form 15G/15H with different banks
Form 15G/H can easily be submitted from the comfort of your home or office. Submit your Form 15G/H through Internet Banking or the Mobile app and save Tax Deducted at Source (TDS) on term-deposit interest.
ICICI Bank
ICICI prescribes the following steps for online furnishing of Form 15G/ 15H
- Log in to ICICI Bank Internet Banking
- From the column on top > Payments and Transfer > Select Tax Centre
- Select Form 15G/H > Update
- Fill up necessary details
- Click Submit
- On the Request Confirmation page, recheck details and > click submit
- You can view the list of deposit accounts for which the form is generated and > click on ‘Submit Form’ to finish the process
- Don't forget to download the Acknowledgment
- Save Service Request number for your future reference.
Or
The other option to file Form 15G / H to ICICI bank is through the Insta Banking Kiosk:
- At the venue, access using a debit card or Internet Banking details
- Select Form 15G/ 15H
- Choose your account number
- Fill in the required details
- Submit a request
Or
The other option to file Form 15G / H to ICICI bank is through the imobile App, also
- Log in to IMobile app
- Click on ‘Services’
- Click on ‘Accounts Services’
- Select Form 15G/15H
- Fill in the necessary details and submit.
SBI Bank
- Login using internet banking credentials
- Select the E-Service tab
- A link can be traced on the left to submit Form 15G/H
- On the right, 15G / H forms will show up
- Fill up the necessary details and click on submit
HDFC Bank
- Go to 'Accounts' tab > select 'Request' Section > Choose 'Form 15G/H'
- View FD Details
- Click Confirm
- View and save the e-acknowledgment for future reference
Deductors (i.e., banks) need to file Forms 15G & 15H on the income tax e-filing website. In addition, the deductor should have a valid TAN and register themselves as Tax Deductor & Collector on the income tax e-filing website to start the process.
If the deductor is not registered, they should first register as Tax Deductor & Collector to proceed.
Preparation Process
Everyone who files a Form 15G or Form 15H is assigned a Unique Identification Number, or UIN, by the tax deductor. The UIN is required to file quarterly statements of Form 15G and Form 15H. Forms 15G and 15H should be maintained for at least seven years.
UIN includes 3 fields - Sequence number, financial year, and TAN of the payer/deductor. The payer should digitize the paper declaration bearing the same sequence number mentioned in the UIN.
Filing Process
- The payer needs to upload Form 15G & Form 15H received quarterly on the e-filing website.
- The payer should quote ‘sequence number’ (Field ‘a’ of UIN) in the quarterly TDS statement against the transaction covered under Form 15G and Form 15H, even though no TDS has been deducted.
- Visit the income tax e-filing website.
- Click on ‘e-file’ and click on ‘Prepare & Submit Online Form (Other than ITR)’
- Prepare the XML zip file by clicking on FORM 15G/FORM 15H (Consolidated)
- To file FORM 15G/15H, you must have a DSC (Digital Signature Certificate)
- Then, generate the signature for the zip file using the utility
- Now, use TAN to log in to incometaxindia.gov.in
- Go to e-File -> Submit Form 15G/15H
- Select the Form Name (Form 15G or Form 15H), Financial Year, Quarter, and Filing Type. Then, click on ‘Validate’.
- Browse the ZIP and Signature files and attach them. These files can be generated from the DSC utility.
- Download the DSC Management Utility
- Click the Upload button. The success message appears on the screen after a successful upload.
If you have forgotten to submit Form 15G or Form 15H and the bank has already deducted TDS, here are some steps you can take to rectify the situation:
- File your income tax return: The first step is to file your income tax return. This will allow you to claim a refund of the excess TDS deducted. The income tax department is responsible for refunding the excess TDS, not the banks or deductors. File your ITR in under 4 minutes with Tax2win.
- Submit Form 15G or Form 15H immediately: Even if you missed the deadline, submit the relevant form as soon as possible to prevent further TDS deductions for the remaining financial year. This will help you avoid any additional deductions going forward.
- Provide necessary details: When filing your income tax return, make sure to include all the necessary details, such as the TDS amount deducted by the bank and any other relevant information. This will help the income tax department process your refund efficiently.
- Keep supporting documents: Maintain a record of all supporting documents, including the Form 15G or Form 15H, and proof of TDS deductions. These documents will serve as evidence during the income tax assessment process.
- Seek professional assistance if needed: If you are unsure about the filing process or need assistance, consider consulting a tax professional. They can guide you through the necessary steps and ensure compliance with tax regulations. Contact experts at Tax2win who can guide you at each step of tax filing.
How to Check Filing Status?
- Go to My Account –>View Form 15G/15H to check the status of your uploaded file.
- The status of the statement will be "Uploaded" once it has been uploaded
- The uploaded file will be processed and validated.
- After validation, the status will be either "Accepted" or "Rejected," which will reflect within 24 hours of the upload.
- Accepted statements will be sent to CPC-TDS to be processed further
- The rejection reason must be available if the status is "Rejected," and the corrected statement must be uploaded.
Some basic information, like the Name of the taxpayer/individual, address, communication details, estimated income, etc., together with verification and a declaration, shall be signed and submitted. The forms are divided into two parts, as shown below. The first part needs to be filled out by you, and the second one needs to be filled by the authority to whom you submit the respective form. Both of these forms seem to be identical, but there is an important difference between the two. Form 15H has an additional column for Date of Birth to keep track of; apparently, you can furnish this form only if you are 60 years of age or older. For more details, see the specimen copies of both forms attached below.
Even if your income is below the basic exemption limit, there are still some cases in which you need to file an ITR. Read here to find out. If you fulfill any of these conditions, you might be required to file an ITR. However, ITR filing can be a little complicated; therefore, it's best to seek professional help to ensure accurate filing and avoid notices.
ITR filing for FY 2023-24 has started, and it is best to file your ITR as soon as possible to avoid the possibility of notices and penalties. Book an Online CA Now!
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