Many in IBF or their relatives are not coming within the tax bracket. However, they may be having Fixed Deposits in Banks or other institutions whose agregate annual interest income is more than Rs.2,500 / Rs.5000.
When TDS on interest is applicable
As per the Income Tax Act, TDS is applicable for interest on Securities if the agregate annual interest on securities exceed Rs. 2,500. For this purpose Interest on Securities has been defined as
interest on any security of the Central Government or a State Govt. OR interest on debentures or other securities for money issued by or on behalf of a local authority or a company or a corporation established by a Central, State or Provincial Act.
TDS is applicable for interest other than securities of the agregate annual interest in this case exceeds Rs. 5,000.
What are the exceptions
However, no TDS is applicable for (among others)
1. Interest in NSC,KVP or Indira Vikas Patra
2. A depositor with primary agricultural society or cooperative for land mortgage.
3. Any interest paid on Refund from Income tax department or under Direct Tax laws.
4. Interest credited to NRE Account.
5. Interest on recurring deposits or savings account with banks or cooperative society.
6. Any interest paid on compensation amount awarded by Motor Vehicles Claims Tribunal where aggregate of interest does not exceed Rs 50,000.
7. Any interest paid by infrastructure capital company or fund or a public sector company on Zero coupon bond issued after 1-6-2005
8. In case declaration filed in form 15G or Form 15 H
Who files what
Form 15H is applicable only in case of a Senior Citizen whose total taxable income is less than the annual maximum exemption limit.
Form 15G is applicable for all other individuals whose total taxable income is less than the maximum annual exemption limit.
In case of Bank deposits, the Form 15G/H is required to be filed branch-wise.
When to File
The law itself does not provide for any date by which the declaration is required to be filed as long as it relates to the income of the year and filed during the year. Since the deduction of tax at source has to be decided on the date of each credit or payment, deduction has to be made for each such credit or payment. Where an investor is not able to file the declaration in earlier part of the year in view of the uncertainty as to the prospect of his income crossing the exemption limit, he can probably inform the bank that deduction could be deferred till the end of the year. But then, the bank would like to have the declaration at the time of payment so that the declaration may have necessarily to be filed before the first quarterly payment, if the interest is payable quarterly or the first monthly payment, if interest is payable monthly as otherwise the Bank/ Organisation may deduct tax and issue the TDS certificate and ask the investor to file a Refund claim with the Tax authorities.
So, every one who needs to file Form 15G or 15H, please make sure that u file the same before 30th April for the Current Financial year (2009-2010)