BackYou can now electronically submit declaration Forms 15G and 15H
Those whose estimated total income for the current financial year is expected to be lower than the taxable limit can use these forms
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In order to reduce cost and make it easy for both, the tax payer and the tax deductor, the Central Board of Direct taxes (CBDT) has simplified the format and procedure for self-declaration of Forms 15G and 15H with effect from 1 October. These are the forms used for avoiding tax deducted at source (TDS). You can now furnish these forms both in paper and electronic formats. Let’s now learn a little bit more about these forms.
THE PURPOSE OF FORM 15G AND FORM 15H
Those whose estimated total income for the current financial year (FY) is expected to be lower than the taxable limit can use these forms. For FY2015-16, the minimum taxable limit for an individual below 60 years is 2.5 lakh,and for those between 60 years and 80 years, the limit is 3 lakh. And if you are above 80 years, you do not have to pay tax if your income is below 5 lakh. According to section 197A of the Income-tax Act, 1961, a tax payer below the age of 60 years can use form 15G, while those above the age of 60 years can use form 15H. These forms help tax payers to avoid TDS on certain incomes.
For instance, banks are mandated by tax authorities to deduct TDS if the interest on a bank fixed deposit (FD) exceeds 10,000 in an FY. TDS is cut at the rate of 10% if the depositor has furnished her Permanent Account Number (PAN), and 20% if it is not provided.
So, if you have put money in bank FDs and if your expected total income is below the taxable limit, you can submit Form 15G or 15H, depending on your age, to avoid TDS on interest earned on such deposits.
While earlier a tax payer had to fill these forms in paper format and submit it with respective deductor separately, now under the simplified procedure, a payee can submit the self-declaration form electronically.
According to the CBDT notification, “The deductor will not deduct tax and will allot a Unique Identification Number (UIN) to all self-declarations." CBDT will soon issue separate guidelines regarding the procedure. “The particulars of self declarations will have to be furnished by the deductor along with UIN in the quarterly TDS statements," stated the notification. Furthermore, the deductor will have to now retain the Forms submitted by the tax payer for seven years.
MINT MONEY TAKE
You should evaluate your expected income for the FY; consider income from every source such as salary, business, agriculture, capital gain, rent, interest and dividends. Ideally, you should do this exercise at the start of each FY, and accordingly submit Form 15G or 15H to avoid paying TDS from beginning of the year.
And if you have not calculated your expected or estimated income yet, you should do it soon, and accordingly submit the applicable Form. Also, do make sure to mention PAN in the Form while submitting, and remember to collect and keep the acknowledgement. You need to submit this form each FY to claim the benefit.
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