Form 15H Explained & 5 Reasons Why You Should File It
What is Form 15H ?
The Income Tax Act, 1961 notifies that every earning person has to pay a tax on their income, called the Tax Deducted at Source (TDS), under certain conditions. The entity paying the salary deducts it during payment. There can be various sources of income like salary, business, capital gains and house property. However, the income tax act also provides clauses under which the person can declare himself non taxable if certain conditions are met. In that case, the person has to submit form 15H under section 197A (1C) requesting the entity not to deduct tax. The most common application of form 15H is in banks to avoid tax deduction from the interest income. You can access it from the bank, official websites of the bank, the EPF and the IT department.
Eligibility for filling up form 15H
- The taxpayer should be an individual and not any company or establishment
- The taxpayer should be a citizen of India
- The age of the taxpayer should be 60 or more than 60
- The total taxable income should be less than the tax exemption limit. It is 3L for ages from 60 to 80 years and 5L for ages above 80.
Important things to keep in mind while filling the form
- The PAN number is the most crucial information in the form. Make sure to fill it right else tax will be deducted at 20% rate
- If wrong information is filled in the form, then under section 277 of the Income Tax Act, you will be subjected to prosecution and conviction.
- The validity of form 15H lasts for one financial year. You have to submit a new form each year.
- Mention the total number of forms you will submit.
When to Submit?
It is ideal to submit the form at the beginning of the year but the deadline is till the close of the financial year. E.g. If a bank furnishes quarterly interest, then if you submit the form at the middle of the year, you have to pay tax for the quarters that have passed before submission.
Reasons why you should file it
For Fixed Deposits
The bank deducts tax on the interest income when it exceeds INR 50000 for persons of age from 60. But if the person meets the last eligibility criteria, then he doesn’t have to pay a tax even if the interest income exceeds INR 50000. In that case, he has to submit form 15H requesting the bank not to apply TDS on the interest income.
For interest on corporate bonds
If the income from the corporate bond exceeds INR 5000, the TDS is deducted from it. So you can submit form 15H to avoid taxation.
For income from post offices
Some digitized post offices can deduct tax from the income made by an individual via the deposits made by them in the post office. The person can submit form 15H to declare himself non-taxable if the required criteria meet that his total taxable income is less than the exemption limit.
For TDS on EPF withdrawal
TDS applies to the EPF (Employee Provident Fund) balance if the money is withdrawn before the completion of five years of continuous service in a company. But if the person has gained an amount of INR 50000 or above, then is free to withdraw it before five years. He has to submit form 15H to declare himself non-taxable, keeping in mind that his total taxable income is below the exemption limit.
For TDS on rent
If the rental payment exceeds Rs. 1.8 lakh in a financial year, you have to pay a TDS. However, if his total income the previous year was non-taxable, he can avoid TDS on the rent by submitting form 15H to the tenant.
For more details, check here.
You can also use form 15H for insurance commission, maturity receipts, dividends, national schemes etc apart from these. You can utilize it in many ways to save money. Be careful while filling the form and submit it in time!
