How can you ensure that the bank does not deduct TDS on interest, If your total income is not taxable?
If your overall revenue is less than the taxation cap, you can request that perhaps the bank not deduct any TDS by submitting Form 15G and 15H to the bank.
Under section 194A of the Income Tax Act, banks are obligated to withhold TDS when your interest earned exceeds Rs.40,000 in a year for individuals other than senior citizens (the limit for senior citizens is Rs. 50,000). This limit is calculated by adding deposits held in almost all of the bank's branches.
Individuals must present Form 15G and Form 15H as self declaration form to their bank, requesting that TDS on interest income not be collected since their income falls below the basic exemption level.
You can also verify to see as in some circumstances these forms are available online straight on the bank's website. The bank requires PAN information for these forms.
|FORM 15G||FORM 15H|
|A residential citizen, a HUF, a foundation, or any other assessee, but not a corporation or a firm below 60 years of age.||Senior citizen refers to a resident who is 60 years old or older.|
|Your overall income is tax-free.||Your overall income is tax-free.|
|The entire amount of interest income liable to taxation for the year is less than the basic exemption limitation, which is Rs.2.5 lakh for fiscal year 2020-21. (AY 2021-22)|
NOTE : Non-residents are not eligible for the benefits of Forms 15G and 15H.
To further understand who can file Forms 15G and 15H, consider the following example.
|Age||21 Years||50 Years||65 Years||68 Years|
|Income that is subject to taxation||Rs. 2,30,000||Rs. 2,20,000||Rs. 2,70,000||Rs. 2,75,000|
|Interest from a savings account||Rs. 2,60,000||Rs. 85,000||Rs. 1,80,000||Rs. 3,30,000|
|Minimum income to qualify for tax exemption||Rs. 2,50,000||Rs. 2,50,000||Rs. 3,00,000||Rs. 3,00,000|
|Section 80 deductions||Rs. 30,000||Rs. 45,000||Rs. 10,000||Rs. 55,000|
|Before allowing section 80, annual revenue exemptions||Rs. 2,60,000||Rs. 2,65,000||Rs. 2,80,000||Rs. 3,30,000|
|Less than 60 Years old||Yes||Yes||No||No|
|More than 60 years old||No||No||Yes||Yes|
|Eligible to file form 15G||No||Yes||No||No|
|Eligible to file form 15H||No||No||Yes||Yes|
|Tax on total income is Nil||Yes||Yes||Yes||Yes|
|Interest income falls below the basic exemption barrier.||No||Yes||N.A.||N.A.|
|Submission of the form||Cannot Submit||Form 15G||Form 15H||Form 15H|
Forms 15G and 15H are only valid for a single fiscal year. As a result, feel free to share these documents each year at the start of the fiscal year. This will ensure that no TDS is deducted from your interest income by the bank.
TDS cannot be refunded by banks or other deductors because it has already been deposited to the income tax department. The only way to get a reimbursement for extra TDS is to file an income tax return. After you file your income tax return, the income tax department will repay any surplus TDS.
TDS is deducted by most banks every quarterly. Don't stress if you fail to submit Form 15G or Form 15H. So that no TDS is charged for the remainder of the fiscal year, submit it as quickly as possible.