HOW TO AVOID TDS IMPLICATION ON INTEREST RECEIPTS FROM FIXED DEPOSITS (FD)

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Feeling harassed for TDS being deducted on your FD interest even though you aren’t liable to pay any taxes? Or lazy enough to claim tax refund & filing ITR or saving unwanted fees given to consultants & Tax Return Preparers (TRP).
Here’s the saviour- Form 15G & 15H. But before our savior arrives, lets have a look at basic provision for TDS on FD.

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Sec 194A- TDS on interests other than interest on Securities provides guidelines on FD interest & tax implications therein.

If interest income on FD is more than Rs.10,000 then TDS should be deducted no matter you are liable to pay tax or not i.e even if your Income is below Minimum Exemption Limit/Slab Rates for Income Tax purpose.

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Feeling scarred?
Lets bring in back our saviour.

Form 15G & 15H are declaration forms to be submitted by an assessee to the concerned bank, wherein stating that he is not liable to pay tax & at the same time directing the said bank not to deduct TDS on interest income from FD or RD. Its a boon to assessee to claim receipt without tax deductions.

Form 15G & 15H can be submitted online or in paper form at all bank branches.

Moreover, one must disclose all the investment details relating to Debentures, Mutual Funds, Shares, etc.

Form 15G is to submitted by HUF and an assessee who is not a Senior Citizen.

Form 15H is to be submitted by a Senior Citizens.

However, there’s a catch here. You need to furnish Form 15G & 15H every year, as its validity is for one financial year only.

Well… That’s not an issue if you want to save fees to be given to TRPs for claiming refund & waiting long for Income Tax Refund to be credited back to your bank account!

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CONCLUSION

Declaration is to be submitted under Form 15G & 15H to avoid TDS implication on interest from FD.

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WRITTEN BY :- Vivek Joshi