What are the Important Things to Know About Form 15g Income Tax?

It is hard to make sense of income tax especially for those that do not understand how it works. Form 15G is an area that often confuses taxpayers. Nevertheless, it is imperative to understand this kind since it aids people, especially those with low earnings, to bypass source tax deductions. Form 15G is a form whereby an individual can self-certify that his/her income does not exceed the taxable limit as stipulated under Section 197A of the Income Tax Act, 1961. Completing this form and submitting it will avoid the deduction of TDS on interest income.

Eligibility Criteria: Who Can Submit Form 15G?

Though income tax form 15G may be useful to some people, it is not available to all. Individuals must meet some eligibility criteria in order to submit this form. The eligibility criteria for submitting form 15G are as follows:

Age Limit

Form 15G is mostly meant for those less than 60 years old. Form 15H must be used by senior citizens (aged 60 years and above).

Residential Status

One can only submit a 15G form if they are residents. This form is non-applicable, however, to non-resident individuals.

Taxable Income Limit

Taxable income is the main determinant. Currently, there exists a Form 15G that is applicable to persons whose estimated total income for the respective financial year falls below the basic exemption limit.

Understanding the Basic Exemption Limit

A taxpayer can only be subjected to pay taxes starting from the basic exemption limit. One should have knowledge of the current basic exemption limit as any excess amount renders a person inadmissible to file Form 15 income tax. Because tax laws are constantly changing, it is advisable to check the latest amendments or seek advice from a professional’s view.

Components of Total Income

Eligibility will depend on all sources of income such as salary, interest income, rental income, and others. All of these items are components that make up the total income. If total income is less than the basic exemption limit, the person may go for filling Form 15G.

The Importance of Accuracy in Declaration

It is essential to observe accuracy when completing Form 15G. Giving wrong or misleading information may result in litigation. The individual must carefully check the form for corrections and ensure all details are correct to prevent any problems with the submission.

Validity Period of Form 15G

Form 15G is not a single declaration for all times. It becomes valid only for the financial year during which it is made. As such, individuals who still meet the requirements have to fill in a new Form 15G at the beginning of every financial year.

The Processes Involved in Filing Form 15G

The process of filling Form 15G is generally simple but one needs to be careful as they fill in the form. Here is a step-by-step guide:

Obtain the Form

Form 15G is available on the website of the Income Tax Department or can be received from the bank.

Provide Personal Details

Provide personal details like name, address, PAN (Permanent Account Number) and date of birth.

Declare Income Details

Provide the estimated income for the financial year and describe all income sources.

Furnish Other Details

Provide details about existing investments and also state if the client has been making previous Form 15G submissions.

Sign the Form

The bank should sign the form and forward it to the revenue authority. In some circumstances, they might require other supporting documents from the bank in order to verify their income.

Receive Acknowledgment

The bank should acknowledge receipt of form 15G upon submission. It is important to do this for the purpose of monitoring the submission in order to ensure that no TDS is deducted.

Consequences of Providing False Information

As such, individuals need to be aware that they may incur serious consequences if they give untrue information on the form 15G. The government’s Income Tax Department has the power to initiate legal proceedings against an individual if the declaration is determined to be incorrect or it turns out that he does not meet the required conditions. For instance, penalties such as fines are provided under sections of the Income Tax Act, and one may be charged accordingly

Monitoring TDS Deductions

Submitting Form 15G is recommended; however, the TDS deductions should be closely inspected in the account. Any erroneous deductions of TDS must be corrected by individuals by immediately notifying the bank.

Changes in Legislation

Tax laws are liable to change, and one needs to be updated with respect to any such revision that could alter eligibility requirements or filing procedures applicable to Form 15G. To keep up to date, people should visit the official website of the Income Tax Department or consult with their tax agent.

When to Submit Form 15G and 15H?

Making returns of Form 15G or 15H is a wise effort by an employee to avoid TDS tax being deducted from income earnings. In submitting either form, it depends on several factors such as age, and amount of income among other form 15G eligibility criteria. Here's a breakdown of when individuals should consider submitting Form 15G or Form 15H:

Form 15G:

Age Below 60

Form 15G is tailored towards persons under sixty years of age. If you are at this age and the total income made in a financial year is less than the basic exemption limit then you might need to submit form 15G.

Taxable Income Threshold

Individuals who exclusively make money through interest, dividends or any other source do not surpass the threshold rate. When they fill out Form 15G, they make a declaration that they are not liable to pay income tax and hence, they will not have TDS deductions.

Regular Monitoring

Individuals should ensure that they file a fresh Form 15G online every financial year where they satisfy the stipulated criteria. Accurate submissions require regular monitoring of income level and tax liability.

Form 15H:

Age 60 and Above

Senior citizens refer to persons who are sixty years old or older, and it is in this category that people will be filling Form 15H. You will qualify to use Form 15H if you are above 65 years and your income does not exceed the taxable limit.

Tax on Total Income

Many senior citizens receive income from multiple sources such as pensions and interest. Submitting Form 15H may also exempt them from TDS deductions provided their total income stays under the basic exemption limit.

Basically, such persons are required to use the Form 15G or Form 15H after satisfying the threshold requirements

Conclusion

TDS form 15G is quite useful to people who have earned money below the taxable limit and are being overcharged for TDS. Understanding the qualifications and making sure that they are answered in the form correctly will allow for better navigation of the income tax territory. However, one needs to be careful to abide by all necessary legal requirements in order not to make anything more complicated.

Every taxpayer must always be updated with regards to the changes that happen in financial landscapes. If you are having issues to understand the 15G limit, consult with Manoj Kumar D & Associates. They can help you understand the basics of Form 15G and file it on your behalf. Visit https://camanojkumar.com/what-is-form-15g/ today to learn more about 15G.