15G and 15H Forms Now Available for Online Submission
TDS deductions can sometimes be annoying and there is no denying of the fact that tax deductions at source can often burn holes in pocket. To add up to this misery, the old method of submitting forms 15G and 15H for evading TDS deductions was pretty difficult. This has however been simplified by CBDT. Today, both these forms are available online and allows electronic submission, making the process whole lot easier.
While online submission allows the submission process to be simplified, one can argue that filling up the forms can still be a painful act. This is no longer true. Compliance requirements have been slashed down as well and the forms have been simplified a lot.
So, how does new forms 15G and 15H work?
Before we start with that, here are a few things you need to remember:
- Online 15G and 15H submission started since October 1, 2015.
- 15H is meant for senior citizens only. This form can be downloaded from here in case one decides to go for manual submission.
- 15G is meant for non-senior Indian citizens. This form can be downloaded from here in case one decides to go for manual submission.
Those who want to evade TDS deductions are required to fill up either 15G or 15H depending on whether they are non-senior or senior citizens. Once the form is filled up, they need to submit the forms online. The tax deductor will then receive the submitted forms and assign UIN or Unique Identification Numbers to the forms. Remember that the forms that are submitted online are all self-declarations. UIN assignment to each form is a compliance requirement from CBDT.
When the TDS deductor issues TDS statements in each quarter, the deductor has to mandatorily the following information in those statements:
- Details of self-declaration.
- Associated UIN.
Additionally, the deductor has to mandatorily keep records (that is retain the forms) for a period of 7 years. This is a compliance requirement as laid down by CBDT and failure to comply can cause troubles for the deductor.
Guide to online submission of 15G and 15H forms
A person may not be eligible for income tax deductions. However, at the end of the year, they may have to end up paying TDS. The rule of thumb says that if a person is not eligible for income tax deductions, TDS should not be deducted as well. This isn’t the case always. For evading TDS, it is necessary to fill form 15G or 15H form. Only then the deductor will not deduct taxes.
Now, as mentioned earlier, 15G and 15H are meant for two different classes of people. 15G is for everyone except senior citizens while 15H is meant for senior citizens only. Though filing of these forms are pretty much similar, the forms themselves are very different. So, it is very important for tax payers to understand these differences and pick up the right form. Failure to comply will be tagged as an illegal action from the tax payers and they will have to pay penalty as well as interest on payable taxes.
Before we move on to the key differences between the two forms, let us take a look at how to submit the forms online. For the purpose, we will take the example of State Bank of India’s online banking interface:
- Head over to the internet banking interface of SBI and click on e-Fixed Deposit tab.
- On the left you can see a link which reads Generate 15 G/H. Click on it.
- On the right side a page will show 15G and 15H forms.
- Fill up the necessary details and click on Submit button.
Let us take a quick look at the screenshot of SBI online banking interface for 15G and 15H form generation:
Now that we know how it works, we need to head over to the differences between the two types of forms. But before that, in case you are not SBI user, you need to work around with the internet banking interface of your bank to know how to generate the forms.
So now, let us take a look at the differences between the Form 15H and 15H
|Parameter for Difference||Form 15G||Form 15H|
|Income Tax Act||Income Tax Act 1961 – Section 197A – Sub-section 1 and sub-section 1(a).||Income Tax Act 1961 – Section 197A – Sub-section 1(c).|
|Eligibility||Only for those people who are less than 60 years old. Even Hindu Undivided Families are eligible for using this form.||Meant only and only for senior citizens, i.e. people who are 60 years old or elder than that.|
|Income Requirement||The total income earned in form of interest earnings from securities except from units and securities explicitly mentioned u/s 80CCA subsection 2(a) in a financial year cannot, under any circumstances, exceed the basic income tax exemption slab as per the Income Tax Act.||There are no income restrictions put forward for senior citizens or the users of form 15H.|
Understanding the income requirements in details
Let us take a quick example to understand the Income Requirement parameter for 15G users. Let us assume that we have a tax payer named Mukund. Let us assume that the total yearly income of Mukund from all sources is INR 340,000. Out of this total early income, Mukund earns INR 270,000 directly as interest earnings from deposits he has in a bank.
Of the total income he has, Mukund invests, say INR 100,000 a year to evade taxes under 80C. He, also has a mediclaim premium of INR 15,000 a year.
So, by income tax rule, he enjoys the following deductions:
- INR 100,000 u/s 80C
- INR 15,000 u/s 80D
Thus, his net income boils down to: INR (340,000 – 100,000 – 15,000) = INR 225,000. This income does not fall in taxable income slab. So, one might naturally think that Mukund is eligible for filing 15G.
The story however is slightly different. We mentioned that Mukund earns INR 270,000 in form of interest earnings. As per income tax rules, interest earnings from all allowed sources cannot exceed INR 250,000. Unfortunately, Mukund’s interest earnings from all allowed sources exceeds the basic exemption level by INR 20,000.
Thus, Mukund is not eligible for filing 15G. Filing a 15G will mean an illegal activity on part of Mukund and he will be subject to penalties.
Understanding 15H in details
Now that we have a decent understanding of the differences between 15G and 15H and we also understand how the income restrictions apply in case of 15G, it is time we take a somewhat detailed look at both the forms. We will start with 15H.
- 15H can be filed only by senior citizens. That is people who are at least 60 years of age or elder than that.
- In previous fiscal year, net payable tax for the person filing 15H in the current fiscal year must be zero.
- The form needs to be separately filed with every deductor with whom an investment is made. This means that if a person has invested in three different branches of a same bank, he or she has to submit the form separately to all three branches.
- It is advised that the tax payer submits the form before he or she receives first interest payment. This will help to avoid TDS deductions right from the beginning. Of course, this isn’t a mandatory requirement but failure to do so will mean TDS deductions and later a lot of work for refund. The deductor will actually issue the TDS certificate if TDS deductions are made. The certificate is always provided at the end of year fiscal year.
- If the person is earning INR 10,000 or more as interest from bank deposits, filing 15H is mandatory.
- If the person is earning INR 5,000 or more as interest from other allowed sources like bonds, debentures, advance, loans etc., filing 15H is mandatory.
Understanding 15G in details
- 15G is only for Indian citizens who have not yet attained the age of 60 years.
- 15G is also meant for HUFs or Hindu Undivided Families.
- All the aforementioned details about 15H are applicable to 15G with exception of the target audience. For 15H, target audience are senior citizens.
- In case a tax payer has a fixed deposit, he or she needs to file the 15G before the first interest payouts are made on the deposited amount.
What if a person files a wrong form or simply files a form when he or she is not supposed to?
It is advised to be very careful while filing a 15G or 15H. However, sometimes mistakes do happen. Nonetheless, such mistakes are not forgiven by the authorities. Incorrect filing will lead to consequences which aren’t known to have happy ending. So, what if a person files a wrong form or simply files a form when he or she is not supposed to? If that happens, Income Tax Act explicitly mentions that the person will be prosecuted u/s 277. However, the extent of punishment depends on how much tax has been evaded. Here are the punishments:
- 6 months of imprisonment. This may be extended to 7 years alongside financial fines. This will happen if the amount of tax one wants to evade is equal to or greater than INR 100,000.
- For less than INR 100,000 taxes, imprisonment sentence is reduced to 3 months but may be extended to 3 years alongside fines.
So, being careful is the only option available for people.
Common misconceptions about 15G and 15H forms
In this section of this article, we will take a look at some of the common misconceptions about the two forms and we will give the actual scenario that prevails as per law. For this purpose, we will use a tabular presentation, making is somewhat easy for people to understand the myths and facts.
|Common Misconception||Factual Truth|
|15H or 15G can be used whenever one wants to avoid paying taxes||NO! Only those who have net income below taxation slab are allowed to use these forms.|
|15G or 15H renders income declaration unnecessary in income returns||NO! Whether one submits the form or not, income from all sources has to be mentioned clearly in income returns.|
|Submission of 15G or 15H means that there is absolutely no need to pay taxes||NO! Even if the forms are submitted, taxes are to be paid if it is found that the person has a tax liability. This means that if a person’s income is above exemption slab, he or she has to pay taxes even after filing the forms. On top of that, the person may be prosecuted for incorrect filing.|
|15G or 15H is submitted to banks and financial institutions only||PARTIALLY CORRECT! The tax payers submit the forms only to banks and financial institutions. The deductor or the receiver of the form then forwards a copy of the forms to income tax commissioner, giving the department of income tax full access to the declarations. The department then conducts further enquiries on the declarations.|
|Submitting 15G or 15H only once is sufficient||NO! This has to be done every year. Here year refers to fiscal year and submissions must be done at the beginning of fiscal year.|
|Though there are deposits in different branches of the same bank, filing 15G or 15H with one branch is sufficient||NO! Forms are to be filed with every individual branch separately.|
|Income level below taxation slab and zero tax liability means PAN details are not required with 15G or 15H filing||NO! It is mandatory even if tax liability is zero. Failure to provide PAN details will attract 20% taxation on earned interests.|
|15G or 15H allows tax evading on every payment form like rent, professional fee, contract payment etc.||NO! 15G or 15H are meant for evading TDS on interest earnings from dividends, interest and securities as well as interests on company deposits, bank deposits, NSS interests etc. (the list is explicitly mentioned in Income Tax law). For every other known form of payment, TDS evading using these forms is not allowed.|
Well, that’s pretty much everything about 15G and 15H and how they can be filed online. In case you have any questions, feel free to drop comments and we shall revert back to you as soon as possible.
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