Situations Where Form 15G Can Help You in Saving Your Money

Form 15G

Form 15G can be defined as a self-declaration that needs to be filed to a financial institution by an individual residing in India (who is not a corporation, firm, or collective organization) for non-deduction of taxes from the earned interest on Term Deposits with the institution. Term Deposits include Recurring Deposits, Fixed Deposits, and Cash Certificates. This statement can only be made if the project earnings from all streams are below or equivalent to the baseline exemption level indicated in the Income Tax Department’s recommendations. For the client to file Form 15G, a valid PAN i.e. Permanent Account Number is require.

This blog will provide a guide on the situations where Form 15G can help you in saving your hard-earned money.

Who is eligible to file Form 15G?

The following are the Form 15G eligibility requirements:
● One need to be an individual or an entity that is not a corporation or a partnership.
● You need to be an Indian resident throughout the appropriate fiscal year.
●  Age needs to be less than 60 years old.
● The tax due based on overall tax liability for the fiscal year is nil.
●  Overall amount of interest income earned throughout the fiscal year needs to be less than the baseline exemption level.
● A Permanent Account Number is mandatory.

Where Form 15G is applicable?

Form 15G is applicable in the following cases:

1. Fixed Deposit Interests

If you have a bank fix deposit, you should be aware that a specific amount of revenue is taken from the interest income you receive. It is obtained by keeping a certain quantity of cash in your bank account. According to the Income Tax Act of 1961, if the earnings from bank interest are above a specific threshold, the bank will collect TDS.
However, assuming your total income from interest is lower than the chargeable threshold, you can send Form 15G to the bank, asking that no TDS be deduct on your interest earnings for that fiscal year.

2. Withdrawal of Employee Provident Fund

If a worker wants to withdraw from his provident fund before actually finishing the term of 5 years with his current company, TDS is levied on the earnings. Even in this scenario, the total taxable earnings, including provident fund withdrawals, is zero. You can prevent any deduction of TDS by submitting Form 15G.

3. Corporate Bonds Income

TDS is charged on corporate bonds if your earnings surpass 5,000 INR. You can ask that TDS not be deduct by submitting Form 15G to the provider.

4. Post Office Deposits

If you fulfill all of the requirements for submitting Form 15G, the Post Office, which offers deposit services, will recognize Form 15G statements for deposits received on National saving plans and post office accounts.

5. LIC Receipts

Starting October of 2014, if the sum collected from insurance is taxable and surpasses 1,00,000 INR, the insurance firm must apply 2% TDS before issuing the money.
As of September 1st, 2019, the TDS rate is 5% of total funds paid or due at maturity. However, if the policyholder’s PAN is not supply to the insurance firm, TDS will be charge at an increase 20% rate.
If your entire earnings are not eligible for taxation, you can ask that TDS not be collect by submitting Form 15G.

6. Insurance Commission

TDS is charge if your insurance commission surpasses 15,000 INR each fiscal year. As an Insurance broker, you can submit Form 15G to ask for TDS non-deduction if your overall income is free from taxes. As an Insurance broker, you can submit Form 15G to ask for TDS non-deduction if your overall income is free from taxes.

7. Rent

TDS is levied on rents above 2,40,000 INR annually. If your entire income is tax-free, you can ask the renter not to collect TDS by filing Form 15G. (started from April 1, 2019).

Where should you submit Form 15G?

Form 15G can be file at any of the following places to declare non-deduction of TDS:
● Banks. (TDS is charge only when the overall interest obtained from all bank branches surpasses 10,000 INR. You need to submit one document at every branch from which you earn interest)
● The Employees Provident Fund Organization at the date of the Provident Fund’s untimely withdrawal.
● Your Organizations that issue corporate bonds
● Many Insurance brokers to insurance businesses.
● The Post Office
Please keep in mind that you do not have to send these documents to the income tax division personally. Simply provide these to the above-mentioned organizations, and they will compile and deliver these documents to the Tax Division.

Conclusion

To reduce the chances of TDS deduction, it is important to fill up Form 15G as soon as you start earning interest. It is also advisable to fill up the Form every year so that there are no gaps in your TDS declaration. You can fill the form from the comfort of your home via your bank’s online website or application or physically by visiting the bank branch from where you are receiving interest income.