October 2, 2015

New Income Tax rules regarding form 15G and 15H

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New Income Tax rules regarding form 15G and 15H-w.e.f 01st October 2015

CBDT has notified the new Income Tax rules regarding form 15G and 15H.Under revised rules few conditions regarding submission Form 15G & 15H has been relaxed. As per new rules an eligible person may file form 15G and 15H in paper as well as in electronic mode. This is an enabling provision under the act, and you may file online 15G and 15H after deductor like banks provide such facility on their online websites to their customers so that customers may furnish Form 15G /Form 15H.It may take some time as CBDT has not given sufficient time for making changes in system.
Further, now no need to submit physical copy to Income tax office by deductor also. Till September,
2015 all the declarations received during the month were required to be submitted to within 7 days to office of the commissioner/Assistant commissioner having jurisdiction to that office. Now Declarations received in October will not be required to be sent in November,2015 and this will save wastage of papers.
The new Forms and Procedure have following main features .The revised procedure shall be effective from the 1st day of October, 2015.
For person seeking non deduction/Deductee/Income receiver Eligible Deductee may file form 15G/15H in paper (in duplicate- one copy for acknowledgement) or electronically.
·         Pan is must to submit form 15G/15H.
·         Only Resident can submit form 15G/15H


In form 15G /15H person have to provide details of Income for which form 15G/15H has already been submitted. For person accepting the Form 15G/15H/Deductor /Payee, he should check whether person providing the form is eligible to submit form or not according to particulars submitted by the person ( This is major responsibility to check the details furnished by the person ) .Pan number is to be verified.( PAN is required to be checked by the deductor) . Deductor/payee after verification shall issue a Unique identification number on form 15G/15H .UIN should be separate for each type of form. The forms received in a particular quarter is required to be reported in quarterly ETDS return even if there is no deduction in that quarter.( Branches were not raising flag where form 15G/H were given and now this will be must)

No need to submit physical copy of form 15G/15H to income tax department. Deductor shall retain the form 15G/15H for seven years.( Proper filing will be needed up to 7 years and Bank should instruct not to destroy these form till the end of 7 years ) Income Tax department has issued a Press release on the subject as under Subject: Simplification of procedure for Form No.15G & 15H – regarding
Tax payers seeking non deduction of tax from certain incomes are required to file a self declaration in Form No. 15G or Form No.15H as per the provisions of Section 197A of the Income-tax Act, 1961 (‘the Act’). In order to reduce the cost of compliance and ease the compliance burden for both, the tax payer and the tax deductor, the Central Board of Direct taxes has simplified the format and procedure for self declaration of Form No.15G or 15H. The procedure for submission of the Forms by the deductor has also been simplified.
Under the simplified procedure, a payee can submit the self-declaration either in paper form or electronically. The deductor will not deduct 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 particulars of self declarations will have to be furnished by the deductor along with UIN in the quarterly TDS statements. The requirement of submitting physical copy of Form 15G and 15H by the deductor to the income-tax authorities has been dispensed with. The deductor will, however be required to retain Form No.15G and 15H for seven years.
The revised procedure shall be effective from the 1st day of October, 2015.
FAQ
What is Form 15H & 15G ?
Form 15G-15H and Income Tax forms which required to be submitted by Specified person earning a specified income to payer for Non deduction of tax at source.
Who can submit form 15G ?
First and foremost only a person who is resident in India can submit form No. 15G. So an NRI cannot submit this form. Any person other than a Company/Firm can submit form No. 15 G. So any Individual and HUF can submit form No. 15G.( Person does not means an individual but it it is defined otherwise)
However it is not that every Individual or HUF can submit form No. 15G. Only the individual or HUF, whose tax on the estimated income for the year is nil and the amount of interest income from all the sources does not exceed the minimum exemption limit, can submit this form.( Read carefully that there are 2 conditions)
So for being eligible for you to submit this form, you need to satisfy both the above conditions. In a situation where due to various deductions the tax payable on total income may be nil but if the total amount of interest income is expected to exceed Rs. 2.50 lakh then you cannot submit this form.
Who can submit form 15H?
Any resident Individual who is sixty years and above of age or completes sixty years during the financial year can submit form No. 15H provided his tax liability on the basis of his estimated income is nil for the financial year though the total amount of interest from all sources may exceed Rs. 3 lacs, the minimum amount liable for tax. So only senior citizens can submit this form. HUF cannot file this despite Karta may be a senior citizen.

What type of Income/sections under which Form 15G & 15H can be given?
Following sections/type of Income under which eligible person may submit form 15G /15H: Mainly these forms are furnished to non deduction of TDS by Banks/Other person on payment of Interest
Section 193 -Interest from Securities -Like eligible Govt /PSU bonds etc
Section 194-Dividends -Dividend from shares etc (presently exempted on receipt)
Section 194A-Interest other than securities -Like interest from Fixed deposit/from loan to other person
Section 194EE -Nation saving scheme (NSS) 
Section 194DA: payment of Taxable Insurance maturity amount

Whether a Person without pan can submit Form 15G/15H ?
No, If person does not have Pan then he cannot submit form 15G and 15H and Tax shall be deducted on higher rate under section 206AA .Further if he has not submitted his pan on form 15G /15H or submitted wrong /incorrect pan on 15G /15H then also section 206AA higher TDS rate of 20% applicable.( Bank should check the correctness of PAN while accepting it)
Whether Non-resident person can submit form 15G/15H ?
NO
I do not have new form 15G or 15H. From where I may get it?
The form in word file are attached with sufficient number of column to accommodate number of receipts/RD accounts. Since the format is in word file, you may increase the columns.