Following up from our post about what to do when bank deducts excess TDS on interest income – let’s discuss today what to do when your Total Income is below the taxable limit and you don’t need to pay any tax, should the Bank still deduct TDS from your Interest Income?
Since TDS is basically tax which is collected on your income by the one who pays you – no TDS should be deducted if your total income is not taxable. Though Banks are required to deduct TDS if your Interest Income is more than Rs 10,000 in a year, but if your total income is below the taxable limit you can submit Form 15G and Form 15H to the Bank requesting them to not deduct any TDS on your interest.
Do note that these forms are valid for one financial year, therefore do check whether you satisfy the conditions for filling them each year and submit them at the start of each financial year. Submitting them as soon as the financial year starts will ensure the banks don’t deduct any TDS on your interest income. Even though your FDs may be maturing in a few years, banks deduct TDS on a yearly basis, do submit these forms in time.
Here are the conditions you need to fulfill to this Form 15G –
- You are an Individual or HUF
- You must be a Resident Indian, this form is not for NRIs even though they may satisfy other conditions
- You should be less than 60 years old
- Tax calculated on your Total Income is Nil
- The total interest income for the year is less than the minimum exemption limit of that year, which is Rs 2,50,000 for financial year 2014-15.
If you are a senior citizen, you can submit Form 15H. Here are the conditions you need to fulfill to submit Form 15H –
- You are an individual
- You must be a Resident Indian, this form is not for NRIs even though they may satisfy other conditions
- You are 60 years old or will be 60 years old during the year for which you are submitting the form
- Tax calculated on your Total Income is Nil