The Central Board of Direct Taxes (CBDT) has notified that those aged 60 years and above with a taxable income of up to Rs 5 lakh can now submit Form 15H in banks and post offices to claim exemption from TDS on interest income from deposits.
Section 87A of the Income-Tax Act, 1961 has been amended vide Finance Act, 2018 which provided that a resident individual, having total income up to Rs 5 lakh, shall be entitled to a rebate of an amount being the amount of tax chargeable or Rs 12,500, whichever is less.
Amendment in Form 15H
The amendment by the CBDT states that banks and financial institutions would accept Form 15H from assessees whose tax liability is ‘nil’ after considering rebate available under Section 87A. Till last financial year, the limit for seeking TDS exemption was Rs 2.5 lakh.
Senior citizens have to submit Form 15H to banks at the beginning of a financial year to ensure that no tax is deducted at source on interest income.
Exemption on TDS can be claimed by submitting Form 15G (those below 60 years) and Form 15H (60 years and above).
Investors seeking non-deduction of TDS on interest income from bank or post office fixed deposits, recurring deposits will have to file Forms 15G or 15H under the provisions of Section 197 A of the Income Tax Act, 1961.
This must be done at the beginning of the financial year and these forms are valid for one financial year. These forms should be filed if the individual’s total income from all sources is below the taxable limit.