Section 197A (1) and 197A (1A) of the Income Tax Act, an assessee (being an individual) claiming certain receipts without the deduction of tax (TDS) is required to make a declaration under Form 15G. In other words, Form 15G is a declaration for non-deduction of TDS on certain receipts.
Criteria for Submitting Form 15G
- This form is to be submitted by the individual assesses (below the age of 60 years) or by a HUF (Hindu Undivided Family).
- Form 15G is required to be submitted by the assesses (individual or HUF) before the receipt of the first payment of interest on a fixed deposit.
- Form 15G is required to be submitted by the individual to all detectors to whom a loan was advanced, i.e., to every branch of the bank through which the individual is getting the interest.
- Form 15G can be submitted by an individual who is not liable to pay income tax. i.e. an individual whose total income does not exceed the basic limit not chargeable to tax.
- This form applies to a resident individual only.
- The total interest earned during the previous year by an individual is less than the basic exemption limit.
Things to Consider while Submitting Form 15G
- An individual is required to submit a copy of their PAN card along with a Letter to the bank and get the Acknowledgement for the same. The copy of the PAN card and the letter is to be submitted to the bank at the beginning of the Financial Year
- The assessee is required to submit the details of Forms 15G/H to other banks (where the assessee holds multiple bank accounts) as the aggregate interest on all bank accounts can be verified by the Banker
- There can be a severe consequence if wrong/false information is declared in the Form 15G.
- Form 15G can be submitted online as most of the banks provide the facility for online submission.
- The assessor must ask for the acknowledgment copy if the application is submitted manually to the bank.
Purposes for Which Form 15G Can be Submitted
As mentioned above form 15G is generally submitted to banks to ensure that TDS is not deducted on interest income. However, there are some other places where an individual can submit Form 15G too.
- TDS on EPF withdrawal: As per the provisions contained under the Income Tax Act, TDS is to be deducted if the balance standing on the EPF account is withdrawn before the expiry of 5 years. If an Assesse plan to withdraw a sum of Rs. 50,000 or more from the EPF account then the Assesse is required to submit Form 15G
- TDS on income from corporate bonds: If a person is holding corporate bonds, TDS is deducted on such bonds if the income of the holder from the bonds exceeds Rs 5,000. However, the holder of the bonds can submit Form 15G to the issuer of the bond requesting non-deduction of TDS.
- TDS on post office deposits: A person can submit Form 15G to the Post offices for non-deduction of TDS.
- TDS on rent: As per the TDS provisions under the Income Tax Act, TDS is to be deducted on rent if aggregate rent received in a year exceeds Rs 1.8 lakhs. Where the tax liability of the landlord on the total income is nil, the landlord can submit Form 15G to the tenant and request for non-deduction of TDS.
TDS on Insurance Commission
As per the TDS provisions under the Income Tax Act, TDS is to be deducted from the insurance commission if it exceeds Rs 15000 in the previous year. However, an insurance agent having NIL tax liability can submit Form 15G for non-deduction of TDS.
