Where TDS is applicable and how to avoid it.

Salary income: Employer deducts TDS on total income, including income other than salary after taking into account all deductions and exemptions. This saves the individual the hassle of paying tax himself.

TDS rate : As applicable to individual based on his income and deductions.

Interest income: TDS is deducted by banks on FDs and RDs if the interest exceeds Rs 10,000 a year. TDS does not end tax liability. Someone in a higher tax slab will need to pay additional tax. Those in lower income bracket can seek a tax refund.

TDS rate : If PAN has been provided, TDS is 10% of income. Otherwise it is 20% of income.

EPF withdrawals: Withdrawals from Employee Provident Fund are subject to TDS if you withdraw before five years of service. However, no TDS is deducted on withdrawals of less than Rs 30,000.

TDS rate : If PAN has been provided, TDS is 10% of the withdrawal. Otherwise it is 20% of the amount.

Property sale: TDS is applicable if the value of the property exceeds Rs 50 lakh. If instalments are being paid TDS is deducted on each instalment. The buyer must obtain a Tax Deduction Account Number to deduct TDS. TDS has to be de -posited along with Form 26QB within a week from the end of the month in which TDS was deducted. Buyer must give TDS certificate to the seller.

TDS rate : If PAN has been provided, TDS is 1% of sale value. Otherwise it is 20 ..

On NRIs: NRIs are not permitted to submit Form 15G/H for NRO deposits and TDS is mandatory on all incomes. In case of resident Indians, TDS kicks in only if interest exceeds Rs 10,000 a year. But there are no such threshold for NRO deposits. Easwar committee has recommended easing of TDS rules for NRIs.

TDS rate : 30% on interest income from bank deposits, 20% from corporate deposits, 15% on short-term capital gains if securities transaction tax (STT) has been paid and 10% on longterm capital gains. If no STT is paid on short-term gains, TDS is 30%. Flat rate of 20% on sale of property.

How to avoid it

TDS can be avoided by submitting Form 15G or 15H. Form 15H is for senior citizens. It can be submitted if there is no tax on total income. Form 15G is for everybody else, except NRIs. It can be filed if tax on total income is nil and total interest income is less than the basic exemption limit.

Source: The Economic Times

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Updated Form-15G and 15H for Asstt. Year 2017-18 with detailed information.

The Income Tax department has been modified the Form No. 15G & 15G as per amended notification No. 11/2013 [F.NO.142/31/2012-SO(TPL)]/SO 410(E) Dated 19.02.13 for the assessment year 2013-14. The New Form No. 15G & 15H is applicable to all Taxpayee who do not want TDS Deduction on their Income  or other under section 203 of the Income-tax Act, 1961.

• No TDS to be deducted by bank in case of –

Interest on saving bank account.

Recurring deposits.

• Bank deducts TDS on interest payment of fixed deposit u/s 194 A.

(As per sec 194 A for payment of interest other than on securities, bank deducts 10% TDS, if payment exceed Rs. 10000 p.a.)

• Form no. 15G and 15H are to be submitted every year with bank. These forms are valid only for the financial year in which you have furnished these forms. If you want to apply for nil TDS in the new financial year, then you will have to resubmit these forms. Form 15H or 15G are meant to prevent TDS and not to avoid tax or file your tax return. You may be required to file your tax return if your total income before the deductions is above the basic tax exemption limit.

• Form 15G/15H is a self declaration form, which is provided by a person resident in India (not being a company or firm) to their deductor that the tax on his estimated total income for the previous year will be NIL.

• Assessee should submit these forms before the end of financial year or before first payment of interest whichever is earlier.

• All banks and financial institutions will deduct TDS if payment of interest on fixed deposits exceeds Rs. 10000 during the financial year.

• Bank will issue TDS certificate also called form 16A which mentions the details of TDS payments with the government.

• The limit of Rs. 10000 is applicable for each branch of a bank. So each branch of the bank will see whether the interest of the whole year on all the FDs exceeds the threshold of 10000.

• If a person is making FD in different branches of same bank then these forms should be deposited at each and every branch where the deposit has been made. For example, if Mr. Ashish has made deposits at three different branches of SBI, then he has to submit the Forms at each branch separately.

• In case of FDs made for longer duration where interest on the FD to be paid on maturity, bank will deduct TDS on interest accrued for the year.

• Please ensure to mention Permanent Account Number (PAN) on the forms while submitting form No. 15G or 15H. In case, taxpayer fails to provide PAN to the deductor, the tax would be deductible @ 20%.

• These Forms are to be submitted in duplicate, one of which is forwarded to the IT department.

• These Forms can only be used for payments like dividends, interest on securities, interest other than interest on securities, national saving schemes, interest on units. For other types of payments (like brokerage, rent etc), these forms cannot be used.

• A bank can track you using unique customer ID. If the combined interest in all the branches of bank exceeds the threshold limit of Rs. 10000, TDS will be deducted if you have not filed form 15G/15H. Therefore, it is best to provide the form then to risk TDS. They can then reclaim the amount by filing their tax returns. The second option is to split fixed deposit across several banks and branches so that TDS exemption limit is not breached.

FORM NO. 15G is used to Declaration under section 197A(1) and section 197A(1A) of the Income-tax Act, 1961 to be made by an individual or a person (not being a company or firm claiming certain receipts without deduction of tax.

FORM NO. 15H is applicable to Declaration under section 197A(1C) of the Income-tax Act, 1961 to be made by an individual who is of the age of sixty years or more claiming certain  receipts without deduction of tax.

Difference between Form 15G and Form 15 H

Form 15G	Form 15H
Submitted by individual below the age of 60 years.	Submitted by senior citizens(60 or above 60 year)
Can be submitted by HUF also.	By individuals only (senior citizens).
Two conditions: The final tax on his estimated total income computed as per the provisions of the Income Tax Act should be nil; and The aggregate amount of interest income etc. received during the financial year from all sources should not exceed the basic exemption limit for that relevant year.	One condition: The final tax on his estimated total income computed as per the provisions of the Income Tax Act should be nil; and Can be submitted by the senior citizen even though the total interest amount from the payer may exceed Rs. 3.0 Lacs (i.e., the limit of basic exemption limit).
Can be submitted by residents only.	Can be submitted by residents only.

Download Form 15G

Download Form 15H

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How to skip TDS on bank fixed deposits ?

Banks have instructions to deduct tax at source on your fixed deposits, should they earn more than Rs.10,000 in a financial year. Here's how you can avoid it altogether.

A bank fixed deposit (FD) is the most popular Indian investment. It’s safe and the 9-10% returns we’ve seen for the past few years are great. But at the end of the day, all your returns are taxed. And if the interest you earn is over Rs.10,000 in one financial year (April to March), it is eligible for tax deduction at source 10.3 per cent of the interest earned. This is regardless of whether you should be paying any tax on it at all. But there are four ways around this:

Distribute the money: The banks can only tax your deposits at source if the interest earned over a financial year is Rs.10,000. The easy way around paying the tax, therefore, is to split the deposits between two banks. It is easy to open an FD in any bank now-a-days, so this is not as inconvenient as it may seem. So long as your interest is less than Rs.10,000 in one bank, you’re safe. Public sector banks do have a problem with you opening an FD if you don’t already have a savings account, but most private ones don’t.

Submit form 15G/15H: If your income is not taxable, the government says your income should not be taxed at source. For this, you need to submit a declaration. If you aren’t a senior citizen, you should submit 15G. This is a simple form that tells the bank that you aren’t liable to pay any tax on the FD, regardless of the amount of interest earned. If you’re a senior citizen without taxable income, the form you’ll need to submit is 15H.

Spread it over two years: In case of a one-time large fixed deposit, one option would be to split the interest over two years. For this, two things are essential – the first is that you would need to have the interest from the FD paid out cumulatively (every quarter or bi-annually). The second is that the investment should be made mid-year, if possible. Consequently, with the interest accrued over two financial years, TDS would not be deducted.

Accounts with different heads: This is one of the many tax advantages of having an HUF account. Despite investing your money here, it is treated as being under another head. Therefore, the two will be treated as separate, even if both are accounts at the same bank.

Source: CA Club India

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Seek easy exemption from TDS on interest: File Form 15G/H electronically

The CBDT has simplified the procedure for filing of self declaration by individuals in 15G and 15H forms, allowing them to do it electronically. Seek easy exemption from TDS on interest: File Form 15G/H electronically.oie_LJ7KWgu9jOZK

What is Form 15G/ 15H?

Forms 15G and 15H are filed by persons whose incomes are below the taxable threshold, to seek exemption from TDS on interest income. Form 15G and Form 15H shall be submitted to the bank or any deductor requesting them not to deduct any TDS on your interest.

While Form 15H is submitted by senior citizens, 15G can be filed by an individual whose taxable income is less than the exemption threshold.

Form 15G/H help customers to avail exemption from TDS on interest earned on investments like bank fixed deposits or EPF withdrawals in a financial year. A fresh Form 15 G/H to be submitted in each new financial year.

The procedure for submission of the forms by the deductor has also been simplified and now they would allot a Unique Identification Number (UIN) to all self-declarations, according to a Central Board of Direct Taxes (CBDT) notification.

Government has simplified the format and procedures for income tax returns filing format that applies to self-declaration forms (form No. 15G or 15H). This change in income tax format has been done to reduce the cost of compliance and ease the burden for both the tax payer and the tax deductor.

Here are top 7 facts to know:

• The requirement of submitting physical copy of Form 15G and 15H by the deductor to the Income-Tax Department authorities has been dispensed with.
• The payee can submit the self-declaration form either on a paper or electronically.
• Tax payers seeking non-deduction of tax from certain incomes are required to file a self declaration through Form No. 15G or Form No.15H as per the provisions of Section 197A of the Income-tax Act, 1961 (‘the Act’).
• The particulars of self-declarations will have to be furnished by the deductor along with UIN in the Quarterly TDS statements.
• Deductor will not deduct income tax and will allot a unique identification number (UIN) to all self-declarations in accordance with a well laid down procedure to be specified separately.
• The deductor will be required to retain Form No.15G and 15H for seven years.
• The revised income tax procedure shall be effective from October 1, 2015.

Now, seek easy exemption from TDS on interest: File Form 15G/H electronically. Download the Order.

Source: Mr. Alok Patnia, founder of Taxmantra.com

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Putting TDS provisions for recurring deposits to work

TDS on recurring deposits makes investors either submit the exemption forms if there is no taxable income. In case of TDS on RD, they may have to revisit their tax calculations and accordingly pay tax

The provisions for the applicability of the tax deduction at source (TDS) for recurring deposits are now into the implementation phase. This means that there is one additional area where the tax payer has to focus their attention. Since there was no tax deduction at source earlier there was no tax implication for any investment made into this area at this initial stage but this will now change. There are several steps that need to be taken so that the individual is in tune with the changed circumstances. Here is a closer look at what needs to be done and the manner in which this can be accomplished.

Change

The change that the union budget 2015 has brought about is that there would be the coverage of recurring deposits in the list of instruments that would be subject to the tax deduction at source. This would mean that if an investor has an income in excess of Rs 10,000 from recurring deposits then this would suffer the same kind of TDS that they would experience when they have fixed deposits. This would mean that at the time of redemption of the investment there would be a lower amount that would come to the investor because the TDS would reduce the amount as compared to earlier when the entire figure would be received by the investor. The main point to remember here is to give the PAN to the bank otherwise the rate of the deduction will be higher.

This does not change the overall nature of taxation for the interest on fixed deposit as these remain taxable which was also the case earlier. So for investors this move will actually ensure that a part of their payment is actually made through the TDS route and hence they would have a reduced liability in terms of payment of advance or self assessment tax. 

Form 15G/15H

Investors who do not have any taxable income and hence would not want any tax to be deducted from the amount that they earn on the recurring deposits would have to ensure that they submit the required forms to the bank. This would have to be done immediately otherwise the deduction would start as the income is earned. This is significant as there is a time element for the submission of the forms and the investor should focus attention to this area if they need to ensure that there is no deduction that they actually face. Senior citizens would need to be especially alert because they are most likely to be covered under these kind of conditions.

Annual update

For a long period of time many investors actually did not pay much attention to the recurring deposit investments that they actually made. This was because they thought that there is not much to do in terms of the tax impact. This often led to a situation wherein the income that was earned from the recurring deposits never made it to the income tax returns at the end of the financial year. This is something that needs to be avoided as it shows that some of the income that is actually taxable is not being shown properly. 

Now this would need special attention as there is likely to be both income as well as tax deduction that would present. Not claiming the tax deduction would lead to a loss of benefit while the non inclusion of the income would mean that the right picture is not being shows in the tax returns. Interest on recurring deposits is taxable and hence has to be included in the calculations as such. Both these aspects would need the attention of the investors and hence this would have to be the focus area and it would need work at the end of every financial year which in a way is a good thing as it ensures that nothing is missed out.

Source: Money Control

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Don't misuse Forms 15G, 15H to avoid TDS

Imprisonment and fines await those who wrongly file the two forms to avoid tax on interest income.

Getting a tax refund can be cumbersome as delays by the Income Tax Department are common. It makes sense to plan your taxes at the beginning of the year, to avoid overpayment and the refund process. Submitting investment declaration with your employer on time and filling form 15G15H will save you half the hassles. However, you cannot randomly submit forms 15G and 15H.

If your interest income exceeds `10,000 a year, the bank will deduct 10% tax at source.If you do not furnish PAN details, the TDS rate will be higher at 20%. However, you can submit a Form 15G and 15H to avoid TDS on interest income. While Form 15G is for Indian residents below 60 years of age, HUFs and trusts, Form 15H is for those above 60.

The repercussions of wrong filing is stiff.A false or wrong declaration in Form 15G attracts penalty under Section 277 of the Income Tax Act. "Prosecution includes imprisonment ranging from three months to two years, and a fine. The term can be extended to seven years and fine, where tax sought to be evaded exceeds `25 lakh," says Sudhir Kaushik, CA and CFO, Taxspanner.Keep in mind the following points.

Eligibility:

The basic conditions for filing 15G are--the final tax on estimated total income computed as per the Income Tax Act should be nil; and, the aggregate of the interest (excluding interest earned on securities) received during the financial year should not exceed the basic exemption slab of `2.5 lakh. If these criteria are met, you can submit Form 15G and the entire interest income would be credited without any tax cut.

You need to meet both criteria. Even if the interest income is less than the basic exemption allowed during that financial year, but your total tax liability is not nil, you will not be eligible for filing Form 15G. The reverse is also true. Say your income is `4 lakh, of which `3 lakh is earned as interest from the bank. You might invest `1.5 lakh in PPF and be out of the tax net, but you are not eligible for Form 15G as though your tax liability is zero, the interest income is high er than the basic exemption of `2 lakh. The refund route is your only recourse.

Form 15H can be only filed by individuals above 60. This form imposes only the first condition--the final tax on the investor's estimated total income should be nil. So, if you are above 60, your taxable income for the financial year can be up to `3 lakh for you to be eligible for 15H. For super senior citizens above 80 years, this limit is `5 lakh.

Source: The Times of India

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SBI deposit holder can generate Form 15G or 15H to avoid TDS deductions by Online "Generate 15 G/H" Utility.

Recently, State Bank of India has provided a very important and useful utility with the name of "Generate 15 G/H".  To avoid TDS deduction on the fixed deposits, please download form 15 G/H, verify it , sign it and submit it to the branch concerned (in three copies) for recording the same in CBS. The branch will subsequently submit the form 15 G/H to the Income Tax Assessing Officer under whose jurisdiction the branch is located.  The functionality for online generation of Form 15G/H has been introduced for the sake of customer convenience by obviating the manual filling up fixed deposit details by the customers.

Required Fields to Generate 15 G/H :

• Name
• Address
• Mobile No.
• Pan No.
• Deposit Details etc.

Some fields like A.O. Codes and nature of business were asked to enter manually. 

Requirement for generation of Form 15G / 15H :

• SBI login user id and password.
• Any deposit in the shape of FDR with any branch of State Bank of India.
• Path for Generation of Form 15G or 15H. is given in below picture. 

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Latest Form 15G or 15H for Asstt. Year 2015-16 and more information.

The Income Tax department has been modified the Form No. 15G & 15G as per amended notification No. 11/2013 [F.NO.142/31/2012-SO(TPL)]/SO 410(E) Dated 19.02.13 for the assessment year 2013-14. The New Form No. 15G & 15H is applicable to all Taxpayee who do not want TDS Deduction on their Income  or other under section 203 of the Income-tax Act, 1961.

• No TDS to be deducted by bank in case of –

Interest on saving bank account.

Recurring deposits.

• Bank deducts TDS on interest payment of fixed deposit u/s 194 A.

(As per sec 194 A for payment of interest other than on securities, bank deducts 10% TDS, if payment exceed Rs. 10000 p.a.)

• Form no. 15G and 15H are to be submitted every year with bank. These forms are valid only for the financial year in which you have furnished these forms. If you want to apply for nil TDS in the new financial year, then you will have to resubmit these forms. Form 15H or 15G are meant to prevent TDS and not to avoid tax or file your tax return. You may be required to file your tax return if your total income before the deductions is above the basic tax exemption limit.

• Form 15G/15H is a self declaration form, which is provided by a person resident in India (not being a company or firm) to their deductor that the tax on his estimated total income for the previous year will be NIL.

• Assessee should submit these forms before the end of financial year or before first payment of interest whichever is earlier.

• All banks and financial institutions will deduct TDS if payment of interest on fixed deposits exceeds Rs. 10000 during the financial year.

• Bank will issue TDS certificate also called form 16A which mentions the details of TDS payments with the government.

• The limit of Rs. 10000 is applicable for each branch of a bank. So each branch of the bank will see whether the interest of the whole year on all the FDs exceeds the threshold of 10000.

• If a person is making FD in different branches of same bank then these forms should be deposited at each and every branch where the deposit has been made. For example, if Mr. Ashish has made deposits at three different branches of SBI, then he has to submit the Forms at each branch separately.

• In case of FDs made for longer duration where interest on the FD to be paid on maturity, bank will deduct TDS on interest accrued for the year.

• Please ensure to mention Permanent Account Number (PAN) on the forms while submitting form No. 15G or 15H. In case, taxpayer fails to provide PAN to the deductor, the tax would be deductible @ 20%.

• These Forms are to be submitted in duplicate, one of which is forwarded to the IT department.

• These Forms can only be used for payments like dividends, interest on securities, interest other than interest on securities, national saving schemes, interest on units. For other types of payments (like brokerage, rent etc), these forms cannot be used.

• A bank can track you using unique customer ID. If the combined interest in all the branches of bank exceeds the threshold limit of Rs. 10000, TDS will be deducted if you have not filed form 15G/15H. Therefore, it is best to provide the form then to risk TDS. They can then reclaim the amount by filing their tax returns. The second option is to split fixed deposit across several banks and branches so that TDS exemption limit is not breached.

FORM NO. 15G is used to Declaration under section 197A(1) and section 197A(1A) of the Income-tax Act, 1961 to be made by an individual or a person (not being a company or firm claiming certain receipts without deduction of tax.

FORM NO. 15H is applicable to Declaration under section 197A(1C) of the Income-tax Act, 1961 to be made by an individual who is of the age of sixty years or more claiming certain  receipts without deduction of tax.

Difference between Form 15G and Form 15 H

Form 15G	Form 15H
Submitted by individual below the age of 60 years.	Submitted by senior citizens(60 or above 60 year)
Can be submitted by HUF also.	By individuals only (senior citizens).
Two conditions: The final tax on his estimated total income computed as per the provisions of the Income Tax Act should be nil; and The aggregate amount of interest income etc. received during the financial year from all sources should not exceed the basic exemption limit for that relevant year.	One condition: The final tax on his estimated total income computed as per the provisions of the Income Tax Act should be nil; and Can be submitted by the senior citizen even though the total interest amount from the payer may exceed Rs. 3.0 Lacs (i.e., the limit of basic exemption limit).
Can be submitted by residents only.	Can be submitted by residents only.

Download Form 15G

Download Form 15H

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CPC (TDS) communicates to Bank for Non reporting of 15G/H transaction

CPC (TDS) has issued a communication to banks regarding non reporting of 15G/H transaction in contravention of rule 31A (4) of Income Tax Rules read with section 200 of Income Tax Act. CPC (TDS) has requested banks to ensure the details of 15G/H transactions from their source data and raise Flag “B” in the original TDS Statements. It has also requested them to ensure submission of correction statements for previous quarterly TDS statements of the branches.

The issued communication has been given below:

To,

(Bank Name)
(PAN:XXXXXXXXXX),

Dear Sir/ Madam,

Please refer the subject mentioned above.

1) In this regard, it is to inform you that ________ branches out of ________ active branches of your bank have not reported transaction of payment of interest on which tax was not deducted in view of declaration of 15G or 15H form by the payee. We are also sending a separate communication to the non-compliant branches, attached in the list.

2) __________ branches have in all reported __________ transactions involving declaration of 15G or 15H. The amount involved in such transactions is to the tune of Rs. _______ Crore for F.Y. 2013-14. Form 15G/15H can be submitted by the payee only if the income including the interest income is less than the taxable amount.

3) You are requested to reconcile the amount of Rs. ______ Crore reported by your bank branches with the interest amount paid to payees who declared 15G or 15H as per core banking solution of your bank. In case of discrepancy, it is requested that the relevant branches may be instructed on top priority to comply to the provisions of Income tax act in respect of complete & correct reporting of transactions involving 15G or 15H declaration.

Since the due date of filing Q2 2014 TDS Statements (October 15) is approaching fast, you are requested to ensure the details of 15G/H transactions from your source data and raise Flag "B" in the Original TDS Statements. Also, please ensure submission of Correction Statements for previous Quarterly TDS Statements of the branches.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

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CPC (TDS) reminder to Banks for raising Flag "B" in TDS Quarterly Statements against 15G/H transactions

As you may be aware that the depositors submit form 15G/H to the bank for no deduction of tax to be made on the interest payments made to them. As per rule 31A (4) of Income Tax Rules read with section 200 of Income Tax Act, the referenced 15G/H transactions are required to be reported by raising Flag "B" in relevant TDS Statements (Form 26Q).

However, CPC(TDS) has observed from its records that you have not raised Flag 'B' for �No deduction on account of 15G/H� even against a single transaction as reported in the TDS Statement(s) submitted for various quarters of Financial Year 2013-14.

It is highly improbable that not even a single depositor has submitted form 15G/H to you for non-deduction of tax on the interest payments. Accordingly, you are advised to take the following action:

Actions to be taken:

• Since the due date of filing Q2 2014 TDS Statements (October 15) is approaching fast, you are requested to check the details of 15G/H transactions from your source data and raise Flag B" in the Original TDS Statements.
• Please submit Correction Statements for previous Quarterly TDS Statements by taking following actions:

• Download the Conso File from our portal. Please use the e-tutorial for necessary help.

• Prepare the correction statement with appropriate changes.

• Please ensure that the TDS Deposited amount equals the TDS Deducted amount in your correction statement. Submit the Correction Statement at TIN Facilitation Centre.

For any assistance, you can also write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

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CPC (TDS) reminder for raising Flag "B" in TDS Quarterly Statements against 15G/H Forms for Fin.Year 2013-14

Dear Deductor (TAN XXXXXXXXXX),
As you may be aware that the depositors submit form 15G/H to the bank for no deduction of tax to be made on the interest payments made to them.

However , it has been observed in your case that you have not raised Flag 'B'(No deduction on account of 15G/H) even against a single transaction as reported in the TDS Statement(s)(Form 26Q) submitted for various quarters of Financial Year 2013-14.

It is highly improbable that not even a single depositor has submitted form 15G/H to you for non-deduction of tax on the interest payments. Accordingly, you are advised to take the following action:

Actions to be taken:

• Check the details of 15G/H cases from your source data.
• Download the Conso File from our portal. Please use the e-tutorial for necessary help.
• Prepare the correction statement with appropriate changes. Please ensure that the TDS Deposited amount equals the TDS Deducted amount in your correction statement.
• Submit the Correction Statement at TIN Facilitation Centre.

For any further assistance, you can also write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

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RBI directs banks to comply with new requirement prescribed in Form 15CA/15CB.

 REMITTANCES TO NON-RESIDENTS - DEDUCTION OF TAX AT SOURCE

A.P. (DIR SERIES)(2013-14) CIRCULAR NO. 151, DATED 30-6-2014

Attention of Authorised Dealers in Foreign Exchange is invited to A.P (DIR Series) Circular No. 56 dated November 26, 2002 read with A. P. (DIR Series) Circular No. 3 dated July 19, 2007 regarding the procedure to be followed in respect of deduction of tax at source while allowing remittances to the non-residents.

2. The Central Board of Direct Taxes (CBDT) has revised the existing instructions to be followed while allowing remittances to the non-residents, with effect from October 1, 2013. It has issued Income Tax (14th Amendment) Rules, 2013 vide Notification No. S.O 2659(E), dated September 2, 2013 on furnishing of information under section 195(6) of the Income Tax Act, 1961 and prescribed the rules and forms to this effect.

3. Reserve Bank of India has reviewed the policy relating to issue of instructions under Foreign Exchange Management Act, 1999 (FEMA), clarifying tax issues. It has now been decided that Reserve Bank of India will not issue any instructions under the FEMA, in this regard. It shall be mandatory on the part of Authorised Dealers to comply with the requirement of the tax laws, as applicable.

4. Authorised Dealers may bring the content of this circular to the notice of their constituents concerned. Further, they may also be advised to approach CBDT for any clarification in this regard.

5. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

Source: www.taxmann.com

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Flag raised for 15G/H despite Income exceeding the amount of exemption.

CPC(TDS) feels glad to provide you with the new feature of downloading Form 27D, the Tax Collection Certificate for Deductees forming part of TCS Statements, filed in the form of 27EQ.

Centralized Processing Cell (TDS) has observed from its records that Flag "B" (for 15G/H Forms) has been wrongly raised in the quarterly TDS Statements as per the provisions of section 197A(1B) of the Income Tax Act, 1961. Following are the provisions of section 197A(1B) for your ready reference:

"The provisions of this section shall not apply where the amount of any income of the nature referred to in sub-section (1) or sub-section (1A), as the case may be, or the aggregate of the amounts of such incomes credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the maximum amount which is not chargeable to income-tax".

What is Form 15G/ H and its relevance :

Under section 197A of the Income Tax Act 1961, Form 15G / H is a self-declaration, which is provided by a person resident in India (not being a Company or Firm) to their deductor that the tax on his estimated total income of the previous year, in which such income is to be included in computing his total income, will be NIL.

The Declaration is made in the following Forms :

• Form 15H - For Senior Citizens
• Form 15G - For other than Senior Citizens

Consequences, if deductor wrongly raises Flag "B" for Forms 15G/H :

If the deductor raises Flag "B" for non-deduction of tax, despite the total payments made by him exceeding the taxable amount, this results into incorrect reporting in the TDS Statements.

Your attention is invited to provisions of section 201 of the Act, which reads as follows :

• Where any person who is required to deduct any sum, does not deduct or does not Pay or after deduction, fails to pay, the whole or any part of the tax, then such person shall be deemed to be an assessee in default in respect of such tax.

Under section 277 of the Act, if a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true is punishable.

This may be noted that obligation to report each transaction correctly in the TDS statements, falls on the deductor and non-compliance amounts to incorrect verification of correctness of TDS statement.

You can reach out to us on ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.

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Timely Issue of TDS Certificate to Customers RBI directed to All Banks.

RBI directed to all Urban Co-operative Banks by its notification No. RBI/2013-14/401, UBD.CO.BPD.(PCB).Cir.No. 41/12.05.001/2013-14 December 5, 2013 regarding issuing of TDS Certificate to Customers.   Detail notification is as under:

RBI/2013-14/401
UBD.CO.BPD.(PCB).Cir.No. 41/12.05.001/2013-14

December 5, 2013

To,

The Chief Executive Officer
All Urban Co-operative Banks

Dear Sir / Madam,

Timely Issue of TDS Certificate to Customers

It has been brought to our notice that some banks are not providing TDS Certificate in Form 16A to their customers in time, causing inconvenience to customers in filing income-tax returns in time.

2. With a view to protecting the interests of depositors and for rendering better customer service, urban co-operative banks (UCBs) are advised to provide to their customers from whose deposit accounts income tax has been deducted at source, TDS Certificate in Form 16A. UCBs are also advised to put in place a system that will enable them to provide Form 16A to their customers within the time-frame prescribed under the Income Tax Rules.

3. This advice is issued under Section 36 (1) (a) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) (10 of 1949).

Yours faithfully,

(Scenta Joy)
Deputy General Manager

Do you want to exempt from TDS Certificate (Click Here)

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Why Taxpayee get Income Notice after filing of Tax Return ?

The income tax department started a move to collect as much as it can into income tax filing scenario. In this contrast, many people got the notice from income tax department saying file income tax return or some discrepancies in income tax return or TDS return.

The number of notice sent to people rises suddenly. This is not because people stop filing income tax return or paying taxes. It is because income tax authorities have a big database and tracking system with which it can send notices to people.

PAN (Permanent account number) plays a vital role as it must for almost all the financial transactions and also give the chance to peep in your financial status. This not only tracks how much you earn but also how much you spend.

The income tax department also has CASS (Computer-aided scrutiny system) which shows any discrepancy in income tax return filed.

There are the common reasons with which you can get an income tax notice -

PAN

Permanent account number (PAN) is must for high-value transactions. People always want to escape from mentioning PAN in investment like FDRs. TDS will be deducted at 20% instead of 10% if PAN number is not with the documents for investments.

In the case of incorrect PAN, there is a provision of penalty of Rs. 10 thousand. Also TDS will not be credited in your account and may be in other account.

Form 26AS

Form 26AS has the details any individual paid taxes during the financial year. It includes any TDS deducted with your PAN number. You can easily check Form 26AS details from incometaxefiling.gov.in. Some banks too are giving an option to check form 26AS with the net banking facility.

If any TDS deducted with your PAN either by employer, banks or any other, you must check the correct details of TDS paid against your PAN number. Any mismatch can lead a notice from income tax department.

Income and expenses mismatch

The entire financial institute fetches report of earning and expenses to income tax department. Computer-enabled software CASS matches it with income tax return filed by the individual. Any mismatch will surely serve you a notice by the income tax department.

Financial institutes include banks, share broker, registrar of properties, mutual fund houses etc. They all demands PAN while doing high-value transactions and report it to the department.

Income tax return filing

Filing income tax return is mandatory whose gross income during the financial year is above RS. 2 lakh. Gross income means before deducting the allowance and investment value such as tax savings, home loan, education loan etc.  There is a provision of penalty up to 300 percent of outstanding tax. 

File income tax return or serve yourself a notice from the income tax department.

File income tax return on time

Timely filing of income tax return also is a good way to escape with the notice from the department. You can file income tax return at the end of assessment year. You can file income tax return of 2012-13 on 31 March 2014.

Any late in filing income tax return may carry problems like you cannot carry forward your losses if income tax file after due date. Also there is no provision of revised income tax return after deadline. There is also a provision of penalty of Rs. 5000 in late filing of income tax return.

Declare previous employer’s income

Now income tax department has full data of your previous employer income with CASS help as well as if the previous employer deducts any TDS on your income, Form 26AS will immediately show against your PAN card. So show the previous employer income in your income tax return or you will serve a notice plus 300 percent penalty on tax evaded.

Misuse of Form 15G and 15H

Form 15G and 15H are the declaration that the income is less than exempted limit; hence no TDS should be deducted. People use it for saving TDS liability and give it to financial authorities. But now you need to mention PAN number for submitting form 15G and 15H. If any wrong declaration is made, income tax department can easily catch it and serve you a notice.

Declare interest on bank account and savings

Interest earned on fixed deposit, saving account, recurring deposit, bond interest is taxable and you must mention it on income tax return. Interest earned on saving account up to Rs. 10000 is tax free but it must be mentioned in income tax return. Interest on post office saving is tax exempted up to Rs. 3500 for individual and Rs. 7000 for joint account holder.

Respond income tax intimation or notice

One must respond to any intimation or notice from income tax department. There may be some mistake from the department too but ignoring them may be very painful as income tax department may treat you in default and can take final step. So respond timely.

 

Source: www.taxalertindia.com

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Free Download New Forms 15CA and 15CB

In exercise of the powers conferred by sub-section (6) of section 195 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (12th Amendment) Rules, 2013.
   (2) They shall come into force on the 1st day of October, 2013.

2. In the Income-tax Rules, 1962 (hereafter referred to as the said rules), for rule 37BB, the following rule shall be substituted, namely:—
"37BB. Furnishing of information by the person responsible for making payment to a non-resident, not being a company, or to a foreign company—(1) The person responsible for making any payment to a non-resident, not being a company, or to a foreign company shall furnish the following, namely:—
   (i)   the information in Part A of Form No.15CA, if the amount of payment does not exceed fifty thousand rupees and the aggregate of such payments made during the financial year does not exceed two lakh fifty thousand rupees;
   (ii)  the information in Part B of Form No.15CA , if the payment is not chargeable to tax and is of the nature specified in column (3) of the specified list ;
   (iii) the information in Part C of Form No.15CA for payments other than the payments referred in clause (i) and clause (ii) after obtaining—
         (a) a certificate in Form No. 15CB from an accountant as defined in the Explanation below sub-section (2) of section 288; or
         (b) a certificate from the Assessing Officer under section 197; or
         (c) an order from the Assessing Officer under sub-section (2) or sub-section (3) of section 195.
 (2) The information in Form No. 15CA shall be furnished by the person electronically to the website designated by the Income-tax Department and thereafter signed printout of the said form shall be submitted to the authorised dealer, prior to remitting the payment.
 (3) An income-tax authority may require the authorised dealer to furnish the signed printout referred to in sub-rule (2) for the purposes of any proceedings under the Act.
 (4) The Director General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture, transmission of data and shall also be responsible for the day-to-day administration in relation to furnishing the information in the manner specified.
     Explanation. - For the purposes of this rule,—
    (a) 'authorised dealer' means a person authorised as an authorised dealer under sub-section (1) of section 10 of the Foreign Exchange Management Act, 1999 (42 of 1999);
    (b) the specified list refers to the payments of the nature as indicated below:
Download Forms 15CA & 15CB

Download Notification (Click Here)

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Now Banks issued Acknowledgement of Form-15H/15G.

RBI has been issued a notification No. RBI/2012-13/516, DBOD.No.Leg.BC.100/09.07.005/2012-13 dated 31.05.2013 for issuing acknowledgement of Form No. 15H/15G to customers who did not want TDS Certificate against interest Income.  Read the following notification.

Acknowledgement by banks at the time of submission of Form 15-G / 15-H

As you are aware banks are not required to deduct TDS from depositors who submit declaration in Form 15-G/15-H under Income Tax Rules, 1962. However, it has been brought to our notice that despite submission of Form 15-G/15-H by customers, banks are deducting tax at source, at times, causing inconvenience to customers resulting in a number of complaints.  Such instances arise because either the forms are misplaced or a track is not kept of forms received in the branches.

2. The matter has been examined by us in consultation with Indian Banks’ Association (IBA). With a view to protect interest of the depositors and for rendering better customer service, banks are advised to give an acknowledgment at the time of receipt of Form 15-G/15-H. This will help in building a system of accountability and customers will not be put to inconvenience due to any omission on part of the banks.

Read more detailed information to issue Acknowledgment of Form 15h or 15G.

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Download Latest Form 15G & 15H (Software), if No TDS for Asstt. Year 2013-14

Normally, when interest amount goes to near about TDS Deducted amount, then the Depositor Deduct TDS on Depositee Amount. But on the request of Depositee the depositor did not deduct TDS on the Interest or Commission amount and in place of TDS issuing the Depositee submit Form 15G or 15H. It is high time to give form 15G and 15H of income tax to the deductor of TDS on your deposit. Form 15G and 15H are the declaration to the deductor that his/her income falls below the income tax taxable limit. Income tax has various acts in which tax is deducted even the assessee has income below the taxable limit. Section 197A of income tax act gives some relief as present various forms to avoid deducting TDS.

The Income Tax department has been modified the Form No. 15G & 15G as per amended notification No. 11/2013 [F.NO.142/31/2012-SO(TPL)]/SO 410(E) Dated 19.02.13 for the assessment year 2013-14. The New Form No. 15G & 15H is applicable to all Taxpayee who do not want TDS Deduction on their Income  or other under section 203 of the Income-tax Act, 1961.

FORM NO. 15G is used to Declaration under section 197A(1) and section 197A(1A) of the Income-tax Act, 1961 to be made by an individual or a person (not being a company or firm claiming certain receipts without deduction of tax.

FORM NO. 15H is applicable to Declaration under section 197A(1C) of the Income-tax Act, 1961 to be made by an individual who is of the age of sixty years or more claiming certain  receipts without deduction of tax.

Download Form 15G

Download Form 15H

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Latest Income Tax Form - 15G, 15H, 16, 16A, 24Q, 26Q, 27C, 27D, 27Q & 27EQ for Asstt. Year 2013-14.

NOTIFICATION NO. 11/2013[F.NO.142/31/2012-SO(TPL)]/SO 410(E), DATED 19-2-2013

 

Income Tax Department had issued a notification dated 19.02.13 regarding amendment of TDS / Income Tax Forms for the Assessment Year 2013-14. The Amended TDS Forms regarding Digital Signature of TDS Return has been changed vide rule 31A and 31AA, substitution of Rules 31ACB, 37J. The Newly amended Income Tax Form i.e. 15G, 15H, 16, 16A, 24Q, 26Q, 27C, 27D, 27Q & 27EQ and Form NO. 26B are available to download for Assessment Year 2013-14.

Form No.	Descrition	Type of File	Free Download
Form 15G	Declaration under section 197A(1) and section 197A(1A) of the Income-tax Act, 1961 to be made by an individual or a person (not being a company or firm claiming certain receipts without deduction of tax	.pdf	Download
Form 15H	Declaration under section 197A(1C) of the Income-tax Act, 1961 to be made by an individual who is of the age of sixty years or more claiming certain receipts without deduction of tax.	.pdf	Download
Form 16	Certificate under section 203 of the Income-tax Act, 1961 for tax deducted at source on salary	.pdf	Download
Form 16A	Certificate under section 203 of the Income-tax Act, 1961 for tax deducted at source	.pdf	Download
Form 24Q	Quarterly Statement of deduction of tax under sub-section (3) of section 200 of the Income-tax Act in respect of salary (quarterly)	.pdf	Download
Form 26B	Form to be filed by the deductor, if he claims refund of sum paid under Chapter XVII-B of the Income-tax Act, 1961	.pdf	Download
Form 26Q	[See sections 193, 194, 194A, 194B, 194BB, 194C, 194D, 194EE, 194F, 194G, 194H, 194-I, 194J, 194LA, and rule 31A] Quarterly statement of deduction of tax under sub-section (3) of section 200 of the Income-tax Act in respect of payments other than salary	.pdf	Download
Form 27C	Declaration under sub-section (1A) of section 206C of the Income-tax Act, 1961 to be made by a buyer for obtaining goods without collection of tax	.pdf	Download
Form 27D	Certificate under section 206C of the Income-tax Act, 1961 for tax collected at source	.pdf	Download
Form 27EQ	Quarterly statement of collection of tax at source under section 206C of the Income-tax Act	.pdf	Download
Form 27Q	Quarterly statement of deduction of tax under sub-section (3) of section 200 of the Income-tax Act in respect of payments other than salary made to non-residents	.pdf	Download

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