The conditions under which Form 15G and 15H may be filed are almost similar yet there is a significant difference which needs to be noted carefully. Actually lot of taxpayers end up filing one of these forms when they are not eligible to do so and vice versa.
Basically, TDS is applicable to any interest above Rs. 10, 000 from most of the common investments such as bank fixed deposits. TDS, is in fact tax paid in advance and credit for which as we all know can be claimed while filing the return and it was to avoid all these formalities that Form 15G and Form 15H was introduced.
Rule 29C of Income Tax Rules offers taxpayers the facility of furnishing Forms 15G or 15H, as the case may be, requesting the payer of income not to deduct any tax. These forms have to be filed in duplicate and once the bank or the post office takes them on record, the entire interest is paid to the investor without any tax deduction.
There are certain conditions under which each form may be filed. It is important to understand the specified conditions and ascertain whether the taxpayer is eligible for filing either 15G or 15H and if so which one. Filing a wrong form without being eligible to do so would be illegal and could involve payment of interest on the tax payable and also resultant penalties. taxmanagementindia.com
The main difference between Forms 15G and 15H is that Form 15G is meant for non-senior citizens whereas Form 15H is meant for senior citizens only.
To be eligible to furnish Form 15G, the non-senior citizen investor needs to fulfill the following two conditions:
(a) The final tax on his estimated total income computed as per the provisions of the Income Tax Act should be nil; and
(b) The aggregate of the interest income etc. received during the financial year should not exceed the basic exemption slab for the relevant assessment year.
If both these conditions are satisfied, Form 15G may be furnished to the bank or the post office and the entire interest income can be received without any TDS deduction.
It may be noted that new set of forms are required to be filed every year and the eligibility criteria as stated above needs to be examined every year before furnishing the forms .
For the sake of safety and avoidance of any TDS at source it would be ideal to submit these forms at the beginning of the financial year so that no TDS deduction is made on the entire amount of interest. If the form is filed somewhere in the middle of the year, the tax already deducted would have to be claimed as a refund and this would mean going through all the formalities which could have been avoided.
CBDT has vide Notification No. 76/2015, Dated : September 29, 2015 revised Rule 29C of Income Tax Rules, 1962 in respect to ONLINE filing of Form 15G & 15H u/s 197A. Summary of this Notification is as follows :-
1) Introduction of Electronic mode of filing Form 15G & 15H (Alternate to Paper Form). No procedural rules has been prescribed as regard to filing of Form 15G. However, It seems Form 15G & 15H can be filed using your income tax website log in & making payment as provided in Section 197(1) or 197(1A) or 197(1C).
2) Same is applicable w.e.f 01.10.2015
3) Now Person responsible for making specified payment (like for eg. bank) has to allot Unique Identification Number to each Form 15G & 15H either filed electronically or in paper form.
4) Monthly reporting requirement of Form 15G & 15H to concerned Commissioner by payers has been now relaxed to Quarterly reporting requirement.
5) Corresponding to Rule 31A(4)(vii) regarding filing of certain details in Statement of Tax Deduction at source has also been incorporated in newly substituted Rule 29C.
6) Introduction of mandatory requirement to keep details of Form 15G & 15H for 7 years from end of financial year in which it is furnished. (For Deductors)
7) Old Form 15G & 15H has been replaced by New Compact Form with less reporting requirement.
8) New Form requires details of All Form 15G or 15H filed for Same FY with other Deductors also.
9) Done away with Details of FD Account Numbers, Rate of Interest, Date of Deposit and Period of Deposit reporting requirements (Details of Interest Schedule –III in Old Form).