We all invest in Fixed deposit of Banks with the hope that we will receive the high interest on it. But sometimes Banks deducts TDS from the Interest and when we enquire about the TDS, Banks ask us to file FORM 15G or FORM 15H. Have you received the same answer from the bank?
I have explained here all concepts related to form 15G/15H and provided the format of Form 15G/ 15H for download.
What is form 15G/15H?
Form 15G is applicable for persons who are less than 60 year of age.
Form 15H is applicable for persons who are of 60 years or more than 60 years.
From 15G/15H are the self-declaration that the tax on total income of the year in which FD interest income is to be included, will be nil.
This means you are giving in writing in the prescribed form that tax on your total income will be zero. Since tax will be zero, so there is no need to Deduct TDS on your income.
For example, you earn Rs. 20,000 from FD Interest and Rs. 2,00,000 from pension income, in the year 2015-16. Your total income will be Rs. 2,20,000 and tax on such income is Nil since it is less than maximum amount chargeable to tax. Hence you can intimate to the bank in form 15G/15H at the starting of the year, that tax on your total income is Nil, so no need to deduct TDS on your FD interest.
Budget 2016 has now introduced Form 15G/15H for rental payments also. According to section 194I of income Tax Act 1961, TDS is deducted @10% on rental payment exceeding Rs. 1,80,000. But the government is of the view that there are many house owners with no taxable income and the TDS @10% is burden for them. So that, they can file form 15G/15H as self declaration for not to deduct TDS on their rental income.
The amendment made by Budget 2016 will take effect from 1st June 2016.
Why Banks deducts TDS on Fixed Deposit?
As per section 194A of income tax Act, 1961 every banking company need to deduct TDS @10% if the amount of interest paid or payable exceeds Rs. 10,000/-.
When Bank Deducts TDS on Fixed Deposit?
When the amount of interest (more than ten thousand) gets credited (not paid) or paid, whichever is earlier.
For example, you made a FD of Rs. 5 Lac for 390 days @ 8% P.a. The bank credit interest after every six months i.e Rs. 40,000/-, but total interest will be paid to you at the end of 390 days. In this case bank will deduct TDS after sixth month at the time of credit since it is earlier.
Here credit means amount is added with your FD amount but not paid to you.
How to avoid TDS on Fixed Deposit with Bank?
You can submit Form 15G or 15H to avoid TDS on Fixed Deposits.
From 1st October 2016 onwards the filing procedures of form 15G/15H has been simplified by Notification 76_2015.
The main points of such notification are as follows:
- The Declaration can now be filed in paper form or in electronic form.
- The bank shall issue a unique identification Number (UIN) to the person.
- The bank shall furnish the declaration along with UIN of every quarter, in a statement to the government (Income Tax department).
- Filing of statement by the bank to government is mandatory irrespective of the fact that no tax has been deducted by the Bank.
- Such declaration must be preserved for seven years.
- The principal Director General of Income Tax (Systems) shall specify the procedures and formats for filing of such statements.
How to download Form 15G and Form 15H?
As per notification No 76_2015, the form 15G/15H can be filed in paper form or in electronic form.
Download here the Form 15G in word format (2016 latest)
Download here the Form 15H in word format (2016 latest)
The government has not made clear on the procedures for Form 15G and Form 15H for rental payments. The same will be clear when the finance act 2016 will come into force.
How to file form 15G and Form 15H online?
You need to login to your bank account and find the online form there.
Suppose you have bank account with ICICI bank, then follow the following steps:
Step 1 : login to ICICI bank and click on Payment & Transfer tab, then Click Manage Your Taxes.
Step 2: You will be diverted to Mannage your Taxes Screeen.
Step 3: Complete the user authotisation details, by submitting the OTP received at your registered mobile No.
Step 4: Then you be taken to ” request for download form 15G/15h screen, then click submit.
Step 5: Then all FD will be listed in the screen and you will need to click download button.
Finally you will have Form 15G or Form 15H (according to your age).
You need to take three prints of i, sign it and submit to the bank.
Form year 2016, you will no more need to submit the physical copies of the Forms, you can submit them online and an Unique Identification Number (UIN) number will be generated therein. Banks are working for this system and soon it will get live.
Note: Still some banks do not have online facility to file the Forms.
How to file Form 15G/15H returns/statement by Banks (payer)?
Bank can use income tax website to file the 15G/15H quarterly statements. There Banks can download the form and upload them online.
Instruction to file Form 15G/15H
What is the due date for filing of Form 15G or Form 15H by Banks (Payer) ?
The due date are declared by Notification No. 9/2016, which are as follows:
|S.No.||Date of ending of the quarter of the financial year||Due Date|
|1||30th June||15th July of Financial Year|
|2||30th September||15th October of the Financial Year|
|3||31st December||15th January of the financial year|
|4||31st March||30th April of the financial Year immediately following the financial year in which declaration is made|
Please comment for any query on form 15G /15H.