avoidance of TDS recovery on bank deposits
This query is : Resolved
07 March 2009
My son has made certain FDs in Banks, the interest income from which exceeds the threshold limit of Rs 10000 for FY 08-09. His Taxable income for the year is however NIL considering Interest on Housing loan. Now, what self-declaration Form should he submit to avoid recovery of TDS by the Bank? Is it Form 15H or any other. Pl clarify.
07 March 2009
Please study the following sourced from http://www.taxworry.com/2008/09/all-about-tds-on-interest-income-how-to.html
"...the popular publication of TAXMAN, "Maser guide to Income Tax" 2002, gave an illustration in Para 10.4 in page 1.187, which reads like this.
" Suppose the aggregate income of an individual from interest on securities--------- is likely to aggregate to Rs. 51,000(then the limit was only Rs. 50,000). In such case since the income exceeds the threshold limit upto which the the income is not taxable, he will not be able to furnish the declaration in 15G under the amended section. The position will remain the same, even if the tax on total income is NIL on account of loss under the other heads or deductions under section 80L or rebate under section 88".
From the above, it appears that one becomes eligible to submit Form G or Form H, as the case may be, only if Taxable Income BEFORE allowing Deductions u/s 80C is below the taxable income
In case income chargeable under head Salaries, the Department has specifically allowed consideration by Employer of Deduction allowable u/s 80C. This could perhaps be due to possibility of casting responsibility on Employer for satisfying himself about correctness of Deduction with proof such as copies of NSCs and LIC Premia etc.
In case of Interest on FDs with Banks, the Department might have felt that it would not be feasible to cast such responsibility on Banks; hence, I understand, provision is not made to consider Deduction allowable u/s 80c for the purpose of submitting Form G or Form H
"...the popular publication of TAXMAN, "Maser guide to Income Tax" 2002, gave an illustration in Para 10.4 in page 1.187, which reads like this.
" Suppose the aggregate income of an individual from interest on securities--------- is likely to aggregate to Rs. 51,000(then the limit was only Rs. 50,000). In such case since the income exceeds the threshold limit upto which the the income is not taxable, he will not be able to furnish the declaration in 15G under the amended section. The position will remain the same, even if the tax on total income is NIL on account of loss under the other heads or deductions under section 80L or rebate under section 88".
From the above, it appears that one becomes eligible to submit Form G or Form H, as the case may be, only if Taxable Income BEFORE allowing Deductions u/s 80C is below the taxable income
In case income chargeable under head Salaries, the Department has specifically allowed consideration by Employer of Deduction allowable u/s 80C. This could perhaps be due to possibility of casting responsibility on Employer for satisfying himself about correctness of Deduction with proof such as copies of NSCs and LIC Premia etc.
In case of Interest on FDs with Banks, the Department might have felt that it would not be feasible to cast such responsibility on Banks; hence, I understand, provision is not made to consider Deduction allowable u/s 80c for the purpose of submitting Form G or Form H
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