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Income tax on fd interest more than 2.5 lacs.

gunturboy26 (Self Employed) (217 Points)

02 February 2016

If a person gets 3,00,000 interest on his fixed deposits and if he doesn't have any other income source, can he submit 15G for 2,50,000 interest and ask the bank to deduct only 5,000 TDS for the remaining 50,000 interest or as the total income is more than 2,50,000, 15G does not apply at all?

Or the bank deducts 30,000 TDS instead of 5,000 and he has to claim 25,000 refund from the income tax department?

What should he do if he has no income source other than the interest on fixed deposits which is more than 2,50,000?

Thank you.

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9 Replies

Udgam Koomar (Tax Technologist) (1949 Points)
Replied 02 February 2016

Technically if the income is above cutoff, you cannot fill 15G/H. bank will deduct and you claim refund.

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gunturboy26 (Self Employed) (217 Points)
Replied 02 February 2016

Originally posted by : Kaardaata
	Technically if the income is above cutoff, you cannot fill 15G/H. bank will deduct and you claim refund.

As there will be such customers and such cases, there should be some procedure apart from deduction and claiming later.

Thanks for the reply.

mohammad rasool baig (Management Consultant) (1026 Points)
Replied 02 February 2016

But the person can submit Form 13 as per Sec 197 for lower deduction of TDS to Income tax officer as his TDS amount is more than the Income tax and technically his tax liability will be only Rs 3000 as rebate will be available for him an amount of Rs 2000.

gunturboy26 (Self Employed) (217 Points)
Replied 02 February 2016

Originally posted by : mohammad rasool baig
	But the person can submit Form 13 as per Sec 197 for lower deduction of TDS to Income tax officer as his TDS amount is more than the Income tax and technically his tax liability will be only Rs 3000 as rebate will be available for him an amount of Rs 2000.

Any procedure where we can tell the bank not to deduct more? What is this rebate of 2000? For 50,000 at 10% TDS should be 5,000.

Thanks for the reply.

gunturboy26 (Self Employed) (217 Points)
Replied 02 February 2016

What is the procedure?

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Udgam Koomar (Tax Technologist) (1949 Points)
Replied 02 February 2016

You have to apply with filled form 13 with your local AO/IT Officer for certificate, once certificate is issues, yo can give to bank.

gunturboy26 (Self Employed) (217 Points)
Replied 02 February 2016

Originally posted by : Kaardaata
	You have to apply with filled form 13 with your local AO/IT Officer for certificate, once certificate is issues, yo can give to bank.

So, if the interest is more than 2,50,000, we cannot give 15 G at all? Going to the IT department is the only option or we can settle this with bank itself?

Thank you for the information.

mohammad rasool baig (Management Consultant) (1026 Points)
Replied 03 February 2016

No, we cannot give 15 G we should go to the AO and obtain non/lower deduction certificate from the AO, we can't settle with the bank.

When we consider about the tax liability as his income was less than 5 Lakhs - he can claim a rebate of Rs 2000. So his tax liability will be Rs 3000 only (provided he has only interest income).

gunturboy26 (Self Employed) (217 Points)
Replied 04 February 2016

Originally posted by : mohammad rasool baig
	No, we cannot give 15 G we should go to the AO and obtain non/lower deduction certificate from the AO, we can't settle with the bank. When we consider about the tax liability as his income was less than 5 Lakhs - he can claim a rebate of Rs 2000. So his tax liability will be Rs 3000 only (provided he has only interest income).