The Income Tax Act of 1961 allows us to enjoy some relaxation on tax-related matters. For instance, if a person’s complete taxable earnings are lower than INR 2.5 lakhs, he/she is not entitled to pay any tax. However, if the taxable income remains between INR 2.5 lakhs and 5 lakhs, you can ask for a tax rebate which will reduce your tax liability to some extent. Moreover, you will also find that some incomes are categorized as tax-exempt incomes by the Income Tax Act of 1961.
Whenever you go for earning interest from your fixed deposits, the banks will always aim for deducting TDS before crediting your interest earned in your account. In case your income does not come under taxable items, this is when Form 15G will come to your aid. Using Form 15G, you can get rid of the TDS deduction on your interest earnings.
In other words, Form 15G is a statement from the taxpayer’s side to request the bank not to deduct any TDS from your earned interest if it exceeds INR forty thousand. The taxpayer clearly states that TDS should not be subtracted as your taxable income is null.
After you complete your Form 15G submission, the bank will not remove any TDS and return you the entire interest that you are entitled to. Click https://www.turtlemint.com/tax/form-15g-and-15h/ to get a better and clear understanding of Form 15G.
Form 15G can only be used by those individuals who meet the below-given parameters —
- You are an Indian resident for that particular financial year,
- You have not exceeded sixty years of age,
- Your tax liability is zero,
- Your complete interest income is lesser than the threshold limit set for the tax slab. For instance, the income from interest should remain below INR 2.5 lakhs which is the threshold limit set for the financial term 2021-22.
Many people face many doubts when it comes to this form. And with the confusion and misinformation all around us at large, it is necessary to know all the facts and aspects of Form 15G. Else it will not take too long to get misguided. Here are some of the regular myths and facts —
1. Myth: Any individual who wants to avoid tax deduction can make use of the Form
Fact: This is an absolutely wrong concept. Only people who earn less than the taxable limits with no tax liability can use this Form.
2. Myth: The Form has to be submitted only to the payer or the financial institutions.
Fact: This notion is partly correct. The payer or deductor who gets the form has to submit a copy of it to the Commissioner of Income Tax department. So, the information has to be passed on to the department to allow them to make additional investigations on it.
3. Myth: Once you submit your declaration, you are no longer required to pay tax for the same.
Fact: According to the rules stated, only individuals with nil tax liability are allowed to submit this form. In the presence of any tax liability, he or she has to pay the stated tax. Again, there is a matter of concern here. When you pay the tax, you can be accused of submitting a wrong declaration. So, before submitting any Form, check properly.
4. Myth: Submitting one Form is enough even if you have deposited at different branches.
Fact: This is a very widespread myth. But no, this approach is absolutely wrong. Wherever you have your deposits, Form 15G has to be submitted in all those branches, separately.
Form 15G can be surely helpful, but you should always use it wisely. As any wrong declaration can have an opposite effect which may lead to another trouble. Use it to your benefit, to get your total interest income while your tax liability is nil.