Form 15G and 15H: All You Need to Know
Almost all of us are familiar with the concept of taxation in India: everyone earning more than 2.5 lakh per annum (5 lakh per annum after 1st April 2019) post-deductions is liable to file their ITR and pay the applicable income tax with or without form 16. Now, since there’s a condition, people earning less than the specified amount can choose not to file their ITR - that’s a choice. However, an individual’s income is liable for other forms of deductions which may or may not be avoided such as TDS.
TDS stands for Tax deduction at source and is basically levied on all kinds of income. Basically, this tax is deducted right at the source from wherein the money is obtained. For instance, in case of your primary income i.e. your salary, your employer will deduct TDS before crediting your disbursing the final sum into your account. Apart from that, TDS is levied on other source of income as well such as interest income generated from investments including FD, mutual funds and land purchase or sale.
Additional Read: How to Calculate Income Tax on Perks?
What are 15G and 15H Forms?
Since TDS is levied on every income irrespective of whether the person eventually receiving the TDS-adjusted money is earning more than 2.5 lakh or not. Thus, for people who aren’t eligible for tax deduction solely because their gross income is not more than 2.5 lakh per annum can claim the deducted TDS by submitting a form 15G or 15H in advance.
15G and 15H forms are declarations that you would submit to the financial institutions and they should not deduct TDS on your interest income. Form 15H is applicable for senior citizens while Form 15G is for those below 60 years of age, and also trusts and HUFs. However, it is only for citizens residing in India; NRIs cannot avail the benefits of these forms.
February 28th, 2019