In India, We take most of the laws/Rules as granted one & feel we are complying with rules without studying in depth of penalty provisions of law. Indian Income Tax Rules /sections are one of those laws. Most of the people feel or under impression that it is easiest law that any common person understand & can comply on his own without much study. This impression became more these days after introduction of E forms of ITR.
This Article is intended to give more idea on how much dangerous to sign and submit Form 15G without knowing the impact of wrong declaration. Recently Income Tax Department has introduced new section - PART A1 in Form 26AS - Annual Tax Statement under Section 203AA of the Income Tax Act, 1961. PART A1 is related to Details of Tax Deducted at Source for 15G / 15H. So Income Tax Department can easily track use & misuse of Form 15G/H like TDS details on line.
Form 15G/H is a type of declaration to be filed by an individual or a person (not being a company or the firm) in order to receive certain payments (dividends, interest on securities, interest other than interest on securities, national saving schemes, interest on units) without deduction of tax at source (TDS).
Generally Banker will advise depositor to give Form 15G/H whenever new FD is created so that banker can save himself from liability of deducting TDS as per IT Act. Customer (depositor) will be happier to give Form 15G/H to avoid tax. Both are acting without knowing implication of wrong declaration of this Form.
Form 15G/H is boon for a person who has Taxable Income less than maximum amount which is not chargeable to income tax. It is boon because he can get his full Interest Income without deduction at source by banker
But Form 15G/H becomes a Suicide form for the people who had signed & given to banker ( may be wrongly guided/pursued by manager) if he has Taxable Income in that year ( salary, house property, business Income & other Income). Narrated in the impact part of this article.
Difference between Form 15G and 15H
Both the Forms are same. The difference is only that Form 15G has to be filed by persons below 60 years of age and Form 15H has to be filed by persons above 60 years of age.
Here, the word person refers to individual or person (not being a company or firm). So, HUF and Association of Persons can also use this form.
Certain points require strict attention regarding Form 15G/H:-
1) PAN is mandatory for making declaration using Form 15G/H from 01/04/2010.
2) Irrespective of the fact that Form15G/H has been filed or not, such income has to be mentioned under proper head while filing the return.
3) These Forms are deposited in two copies, one of which is forwarded to the IT department. So, the Income Tax Authorities can make further inquiries regarding the same income.
4) It should be deposited at the beginning of each financial year.
5) These Forms should be deposited at each and every branch where the deposit has been made. For example, if you have made deposits at three different branches of Axis Bank, then you have to submit the Forms at each branch separately.
6) These Forms can only be used for payments like dividends, interest on securities, interest other than interest on securities, national saving schemes, interest on units. For other types of payments, these forms cannot be used.
7) These Forms are not applicable for NRIs
IMPACT OF WRONG DECLARATION
Snap shot of declaration part of Form 15G herewith.
Any Wrong declaration in this form will attract Section 277 of Income Tax Act.
Since Income Tax Department has modified Form 26AS – Online Tracker of Income, It is adviseable for all assessee especially salaried class to resist themselves "NOT SIGNING" form Form 15G/H. Assessee will be penalized under 277 along with huge penalty for concealment & Interest from day of wrong declaration. Even your source of Income for that Fixed Deposit will be under scruitiny. It is always better to disclose correct Income.
LAST but not least, any declaration or filing of Form including ITR will become SUICIDE ACT for people if they commit mistake knowingly or unknowingly. IGNORANCE OF LAW IS NOT ACCEPTABLE. Law is a specialized knowledge. So do act only if you know law in full.
CA. Chikkerur C R
B.com, MBA, DISA & LLB
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