Hurry! Submit Form 15G/15H at the beginning of the year itself and avoid TDS

As per the TDS rules, if interest income exceeds Rs 10,000 in a financial year, 10% tax will be deducted at source. If PAN is not submitted then the TDS rate will be 20%. However, investors with total taxable income below the basic exemption limit can submit a declaration in Form 15G/15H to avoid TDS. These forms have to be submitted in duplicate.

·         Form 15G: This is for individuals below 60 years, HUFs and trusts, etc.

·         Form 15H: This is for Senior citizens and those above 80 years.

To avoid TDS it is advisable to submit the Form 15G/15H at the beginning of the year itself. From FY 2013-14, the IT Department has made some changes in the forms. In the old form one only had to declare that one's income was below the taxable limit and therefore TDS should not be deducted.

The new forms require some additional information on income from all sources and tax deduction availed of during the financial year. One must also mention the expected taxable income in the financial year from all income heads like salary, interest, capital gains, rent etc. The assessee can avoid disclosure of the tax-free incomes like interest from PF, PPF and tax-free bonds.

Now let us check whether you are eligible to submit the Form 15G or 15H. An individual or HUF must satisfy two conditions:

Condition 1: The estimated taxable income for the financial year should be less than the basic exemption limit. This is Rs 2 lac for individuals below 60 years and HUFs, Rs 2.5 lac for senior citizens, and Rs 5 lac for very senior citizens above 80 years.

Condition 2: This is applicable only to Form 15G. The total interest income from all sources should not exceed the basic exemption limit. This condition does not apply to senior citizens because most retired people get their maximum income from interest.

The forms also require the assessee to furnish details of other incomes, like dividend from shares and mutual funds. Although dividend income is tax-free the IT Department still wants to know how much you earned from them.