Extra time for submitting Forms 15G, 15H for FY2020-21 to avoid TDS

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The extension of validity of Form 15G and Form 15H of FY 2019-20 would come as a relief for the taxpayers who usually have to submit these forms in the first week of April every financial year to lower or avoid TDS.

The Central Board of Direct Taxes (CBDT) has allowed the Form 15G/Form 15H submitted by taxpayers for FY 2019-20 to remain valid till June 30, 2020 for FY 2020-21. This would mean that investors who are required to submit the Form-15G/Form-15H for lower or nil deduction of tax from their income can submit it in the first week of July, 2020, as well for FY2020-21.

As per the order dated April 3, 2020 posted by the CBDT on its official Twitter handle, “In case if a person had submitted valid Form 15G and Form 15H to the banks or other institutions for F.Y. 2019-20, then these Form 15G and Form 15 H will be valid up to 30.06.2020 for FY 2020-21 also. It is reiterated that the payer who has not deducted tax on the basis of the said Form 15G and Form 15H shall require to report details of such payments/credit in the TDS statement for the quarter ending 30.06.2020 in accordance with the provisions of the rule 31A (4)(vii) of the Income-tax Rules, 1962. ”

The extension of validity of Form 15G and Form 15H of FY 2019-20 would come as relief for the taxpayers who usually have to submit these forms in the first week of April every financial year to avoid TDS/ request for lower TDS on interest income on fixed deposits/bonds usually received from banks/other financial institutions.

The decision follows severe disruption of the normal working in almost all sectors of economy including functioning of banks, other institutions etc. The CBDT order says that there may be instances where an individual may not be able to submit Form 15G and Form15H in time to the relevant institutions which could result in TDS by the banks even when the receiver does not have any tax liability. These directions have been issued by the income tax department to mitigate such hardships.

According to current income tax rules, TDS is deducted if the total interest income paid to an individual exceeds Rs 40,000 in a financial year. In case of senior citizen, tax is deducted from the interest income if it exceeds Rs 50,000 in a financial year.

Form 15G can be submitted for a financial year only if the income for which the person is filing the form is estimated to be below the taxable level for that financial year. Form 15H can be submitted for a financial year if the estimated total tax liability for that year is nil. These are the main eligibility criteria for the submission of these forms. Form 15G is to be submitted by an eligible individual whose age is below sixty years during the financial year. Similarly, Form 15H is submitted by an eligible senior citizen whose age is sixty years or more during the financial year.
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