About giving form 15-g and 15-h in banks.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 April 2018 SIR,
Please give opinion and guidance in following confusions.

Que-1
An individual has interest income Rs. 40000 from bank F.D., and his total taxable income for FY 2018-19 will also go beyond the exemption limits,
and even then,
he gives form 15-G or H in banks in April 2018, for not deducting TDS,
then,
is this breach of income tax rules – or law ?

Many bank a/c holders do this for non-deduction of TDS and then pay the self-assessment income tax at the time of filing return, if there is any tax-liability.

Is this okay? Can people do this?

What kind of problems he will have to face in future?
Is there any penalty for this?

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Q-2
If, there is a rule and limit of Rs. 10,000 for TDS deduction, then why the computer systems of banks accept form 15G/H, even in the cases where interest is much more than Rs. 10,000 ?

Banks have all data in their systems that which account holder will get how much interest income on F.D.s maturing in that financial year.

Why is such confusion and misconception about form 15-G/H, prevailing among account holders ?