At a glance: What Are the Types Of TDS For Which Form 15G or

I am doing an internship in a software company. Supposing I will be paid 25k per month and am working for ONLY 2 MONTHS. Is there any way where I can get exempt from tax. I heard that form 15G is something for that. But .. Am I eligible to fill that form? I had NOT paid any tax before and don’t have a pan card too. I am sure that my income for this financial year won’t exceed 1lakh (which I heard is the max amount for which tax is not applicable). Sasidhar Kasturi , Hyderabad

Section 197A of the I T Act provides that persons suffering tax at source in case of certain types of income earned by them can get relief from TDS if declaration in Form 15 G or 15 H are filed by resident individuals .The said provision is as under

197A. (1) Notwithstanding anything contained in section 194 or section 194EE, no deduction of tax shall be made under any of the said sections in the case of an individual, who is resident in India, if such individual furnishes to the person responsible for paying any income of the nature referred to in section 194 or, as the case may be, section 194EE, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.

(1A) Notwithstanding anything contained in section 193 or] section 194A or section 194K, no deduction of tax shall be made under any of the said sections in the case of a person (not being a company or a firm), if such person furnishes to the person responsible for paying any income of the nature referred to in 

section 193 or section 194A or section 194K, as the case may be, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.

The aforesaid provision makes it clear that relief is given for income suffering tax at source as per

1. section 193 -interest on securities
2. section 194- Dividend
3. section 194A-Interest other than “interest on securities”
4. section 194EE-Payments in respect of deposits under National Savings Scheme, etc
5. section 194K-Income in respect of Units

6.      So, if somebody is getting income which suffers tax at source under the aforesaid sections, can file Form 15G or 15H as the case maybe and get relief from deduction of tax at source. Therefore , it is clear that section 197A is not applicable in case of any other type of deduction of tax at source . In other words 15G or 15H cannot be filed in case of following types of TDS

7.      In your case , the payment of internship may fall either as salary or professional fee which are covered u/s 192 and 194J respectively. In any case , the payment to you does not fall within the five types of payments covered u/s 197A of the I T Act. So, you can not file Form 15G for the non deduction of tax at source.

8.      The solution to your problem?
The only solution is to file an application with the ITO having jurisdictions over you in Form 13 as per section 197 for NIL deduction certificate. The A.O will issue a certificate in terms of Rule 28AA. Please remember these days , ITO(TDS) having jurisdiction over you , are authorised to issue such certificate of lower tax or NIL tax . SO , contact the TDS wing for such certificates.

9.      Lastly, if you do not succeed , get PAN allotted , file return and claim refund of tax.