Understand Why Senior Citizens Are Seeking More Time for Filing Forms 15G & 15H
The elderly in Tamil Nadu, India are calling for an extension to the time allotted for filling bank Form 15G and form 15H. Form 15G and 15H are self-declaration forms that individuals need to submit to their banks or financial firms. The Forms declare the account holder has annual income from income less than the standard income tax exemption. Individuals above the age of 60 must submit Form 15H at the start of each year, while for those under the age of 60, Form 15G serves the same purpose. With banks operating with reduced business hours amid COVID-19 outbreaks, many senior citizens find it difficult to make it in time for these deadlines. Due to this, they’ve called for an extension in order to allow more time before submitting these forms.
In the wake of last year’s pandemic, the government has been taking many steps to help those who have been affected. One such step was extending Form 15G and Form 15H submission date up to June 30. This is a great relief for people who may have struggled with getting their TDS declaration submitted on time because of the reduced bank business hours or other difficulties caused by the pandemic.
What are Form 15G and 15H?
Form 15G and Form 15H are ways to avoid paying taxes on your FD interest.
Banks deduct TDS from your FD interest income before crediting it to your account. But if you have no taxable income, then these declaration forms can be used to avoid TDS on FD interest. You just need to declare through the form that the bank should not deduct any tax because of your nil taxable income and submit it to the bank so they will pay out all of your earned interest without taking any taxes first!
Eligibility criteria to apply for Form 15G:
- You must be a resident Indian or a member of a HUF (Hindu Undivided Family)
- Your age must be less than 60 years.
- Your tax liability must be nil.
- The entire amount of income from the interest you have generated must be less than the threshold limit of the current tax slab. For the financial year 2021-22, the threshold limit is set to 2,50,000 INR.
- Your income from interest must be more than 40,000 INR.
Eligibility criteria to apply for Form 15H:
- You must be a resident Indian.
- You must be 60 years old or older.
- Your tax liability must be nil.
- Your income from interest must be more than 50,000 INR.
When Form 15G must be filed?
Forms 15G remains effective for one fiscal year. To receive a TDS deduction for each fiscal year, you need to file the form once every year. Preferably, the form should be completed at the beginning of each fiscal year to notify the bank to not collect TDS from the interest earned by you in that fiscal year.
However, it is also possible to submit Form 15G anytime else during a fiscal year. In this case, the income from interest from the previous quarters will be eligible for TDS deduction by the bank. You can also get a refund of the amount by requesting the same when submitting your income tax returns.
What happens if you fail to file Form 15G and 15H?
You would not be penalized or charged; instead, the bank would deduct TDS from your earned interest and credit the sum to your account. Form 15G and 15H halt the deduction and deposit of TDS (Tax Deducted at Source) on your behalf. Form 15G is applicable for individuals under the age of 60, whereas Form 15H is solely for senior citizens i.e. people beyond the age of 60.
However, if you don’t owe any money in taxes, you do not need to worry about Forms 15G and 15H because they are not relevant in this case. All you have to do is seek reimbursement of the TDS generated by the bank when you file your income tax returns.
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There are a number of exemptions from TDS but for individuals earning interest income, Form 15G and Form 15H is an important document to file. Form 15G is available for individuals up to 60 years old while Form 15H is exclusively for senior citizens. Not filing the form can result in tax deductions on your interest income which should not be overlooked as the amount will only increase with time. For those who have missed out on submitting their forms by June 30th, don’t worry! The deadline has been extended till then so you still have more than enough time to submit both forms and enjoy peace of mind knowing that all your interest will be yours without any deduction whatsoever.