Submit Form 15G & Form 15H to the bank, before they deduct TDS!

Yesterday, we gave you some tips about how you can get yourself started and plan your taxes for the financial year which started on 1st April 2015.

If you expect your total income to be less than Rs 2,50,000, the minimum income which is exempt from tax for financial year 2015-16 – you can request the bank to not deduct TDS on interest. This can be done by submitting Form 15G or Form 15H to the bank. You must do so at the start of the financial year so that bank doesn’t deduct TDS on your interest income. Do note that starting 1st June 2015, TDS will also be deducted on interest income from Recurring Deposits. And you can submit Form 15G & Form 15H if your income is below taxable limit and no TDS should be deducted on those as well.

Here are the conditions you must fulfill to submit Form 15G:

  1. You are an individual or HUF
  2. You must be a Resident Indian
  3. You should be less than 60 years old
  4. Tax calculated on your Total Income is nil
  5. The total interest income for the year is less than the minimum exemption limit of that year, which is Rs 2,50,000 for financial year 2015-16.

Here are the conditions you must fulfill to submit Form 15H:

  1. You are an individual
  2. You must be a Resident Indian
  3. You are 60 years old or will be 60 years old during the year for which you are submitting the form
  4. Tax calculated on your Total Income is nil

Banks usually deduct TDS @ 10% when your interest income exceeds Rs 10,000 in a financial year. If you do not submit PAN details to them, they may deduct TDS @ 20%.

Starting FY 2015-16 banks will sum up interest income from all the deposits held by you in all its branches and if this exceeds Rs 10,000 they will be deducting TDS.

If you do not submit your Form 15G & Form 15H timely and the bank deducts TDS, you can claim a refund by filing an income tax return.

Do remember to submit your forms on time! Write to us if you have any questions support@cleartax.in

 

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