Tax deducted at source (TDS) is a major worry for fixed and recurring deposit investors. Currently, banks deduct TDS if the total interest earned is more than Rs 10,000 in a year. The only way to avoid it is to submit the Form 15G or 15H on time. Form 15H is for senior citizens and 15G for those below 60. Since banks consider the total interest payable in a year and not total interest paid in a year for computing TDS, the deduction is made at the beginning of the financial year. So, it is best to hurry and submit the relevant forms in the first week of April itself. However, you need to be careful. People who have taxable income are not eligible to file 15G and 15H forms. If you file it illegally, the IT Department can take action against you
The government has provided a big relief to senior citizens in its latest Budget, raising tax free interest from Rs 10,000 to Rs 50,000. So, senior citizens earning interest up to Rs 50,000 can submit Form 15H and avoid TDS. Note that this new Rs 50,000 limit under Section 80TTB is for deposits across all banks and post offices.
Are you eligible to submit Forms 15G, 15H? Avoiding TDS by submitting forms 15G and 15H illegally can lead to action by the taxman. *Total income before availing of section 80C deductions.
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