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WHAT IS FORM 15G AND WHO IS ELIGIBLE FOR FILING FORM 15G

What is Form 15g and Who is Eligible for Filing Form 15g

Mohan Kulkarni took VRS recently after spending a lifetime in a pharmaceutical company at the age of 55. Being in the accounts departments, he had a fairly good idea on how to make the right investments and ensure that he had enough for a comfortable retired life. He had planned his investments in such a manner as to optimise returns and ensure that he did not have to pay income tax. He had put his savings in mutual funds, bank deposits, National Savings Certificates etc.

Being an accountant, Kulkarni was well aware that banks deducted TDS (tax deducted at source) at 10 per cent if interest income per year exceeded Rs 10,000. Kulkarni’s interest earnings exceeded that amount. However, since his taxable income was less than Rs 3 lakh, he need not have to pay income tax.

A TDS deduction meant that he would have to file income tax returns and wait for the income tax department to refund the TDS. Since he didn’t want his funds locked up in this way, Kulkarni decided to submit form 15G to the bank. If he submitted form 15 G, the bank would not deduct TDS and Kulkarni would not have to wait for the IT department to return the taxes he had already paid. If Kulkarni had been above 60 years of age, he would have had to fill form 15H.

So what is form 15? As we have explained here, form 15 enables you to request the bank not to deduct TDS from the interest income you have earned from bank deposits. However, this income tax form for 15G is not available for everyone. Some conditions have to be met before you are eligible. You can submit form 15 at the bank; some have an online facility that enables you to fill form 15G over the Internet.

If you plan to submit form 15G or 15H, make sure you do it at the beginning of the financial year to prevent any TDS being deducted by the bank. The forms will have to be submitted every year. Remember that making fake declarations and furnishing false information is punishable by law, and could involve fines and even imprisonment.

Form 15G is not for only bank fixed deposits. You can use it to prevent TDS being cut on withdrawal of Employees Provident Fund (EPF), corporate bonds, post office deposits and even rental income.

Who’s eligible for form 15G?

• You must be below 60 years of age and your income must be below the taxable limit. If above 60, you will need to fill form 15H.

• Only individuals, Hindu undivided families and trusts can fill form 15G. Companies are not allowed to do this.

• You have zero tax liability. That is, your income is well below the taxable limit. This is at the moment Rs 2.5 lakh per annum.

• Your interest income should be under the income tax limit.

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