03 June 2013
You now have to give additional information on income from all sources and tax deduction availed of during the financial year. According to the TDS rules, if interest income exceeds Rs 10,000 in a year, 10% tax will be deducted at source. If the investor has not furnished his PAN details, the TDS rate will be higher at 20%. However, if the investor's total taxable income is below the basic exemption limit, he can submit a declaration to avoid TDS. Form 15G is to be used by individuals below 60 years, HUFs and trusts, etc.
Senior citizens and those above 80 years must use Form 15H. Till now, one only had to declare in the form that one's income was below the taxable limit and, therefore, the TDS should not be deducted. Now, however, one must also mention the expected taxable income in the financial year. This includes income from all sources, such as salary, interest, rent and capital gains. One can avoid the tax-free income like interest from the PF, the PPF and tax-free bonds.
03 June 2013
Are you eligible? Before you rush to submit the Form 15G or 15H, make sure that you are eligible. An individual or HUF must satisfy two conditions. First, the estimated taxable income for the financial year should be less than the basic exemption limit. This is Rs 2 lakh for individuals below 60 years and HUFs, Rs 2.5 lakh for senior citizens, and Rs 5 lakh for very senior citizens above 80 years.
The second condition, which is applicable only to Form 15G, is that the total interest income from all sources should not exceed the basic exemption limit. Senior citizens have been exempted from this condition because most retirees get the biggest chunk of their income from interest.
These conditions are not new. The only difference is that now the individual has to specifically mention his expected income in the form. In the table below, we look at the various situations in which an individual is eligible to file the declaration.
CAclubindia
