Form 15G is a legitimate form that everyone under the age of 60 who has a fixed deposit account with a bank must complete. In order to prevent TDS deductions from being made on the interest earned on the particular deposit account, this is done.
Prior to this change, TDS deductions applied to all fixed deposit accounts with a gross interest sum of at least ₹10,000 in a given financial year. The Government has raised the threshold for designating an account liable to TDS deductions beginning with the financial year 2019–20. The current cutoff point for doing so is ₹40,000 in a given fiscal year. Learn how to fill Form 15G for PF withdrawal.
What is Form 15G?
Form 15G is a self-declaration form that can be submitted by individuals to their banks or other financial institutions to avoid TDS (Tax Deducted at Source) deduction on interest income earned on fixed deposits, recurring deposits, or other investments. It is applicable to individuals below the age of 60 years and Hindu Undivided Families (HUFs) whose total income is below the taxable limit.
Specifications of Form 15G
Form 15G’s main characteristics are:
- If the taxpayer’s annual income is below the exemption limit, this form, which is a self-declaration form, must be submitted
- The Income Tax Act of 1961’s Section 197A provision serves as the foundation for all of the rules and guidelines contained in this self-declaration form
- Since 2015, the Form 15G’s structure has undergone a number of adjustments intended to reduce the costs and compliance requirements placed on the deductee and tax deductor
- The present structure for Form 15G and Form 15H was created by the Central Board of Direct Taxes (CBDT).
- Taxpayers under the age of 60 may utilise Form 15G. Anyone over 60 must complete Form 15H, which is quite identical to Form 15G. Senior citizens are the only ones who use this form
- Form 15G must be submitted in the first quarter of any FY, if there are any existing commitments, in order to be qualified for the benefit. This form must be submitted for brand-new ventures before an investment garners attention for the first time.
How to Fill EPF Form 15G for PF Withdrawal?
The option to submit the properly filled form online is also available on the websites of India’s leading banks. Different iterations of the provided form can be accessible on the various websites of the nation’s major banks, which can be a little confusing. But since there are legitimate variations, there is no need to be frightened. The form that may be seen on the Income Tax Department’s website is the generic version.
Also, Not every person is qualified to submit Form 15G or Form 15H to avoid TDS.
AVOIDING TDS DOES NOT THEREFORE IMPLY AVOIDING TAX.
Is Form 15G Mandatory for PF Withdrawal?
No, Form 15G is not mandatory for PF withdrawal. However, if the total amount of PF withdrawal is more than Rs. 50,000 and the individual has not completed five years of continuous service, TDS will be deducted at the rate of 10% if PAN is provided.
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How Much Amount of PF Interest is Tax-free?
Before the financial year 2021-22, the interest credited to the EPF account on any amount of contribution was tax-free. However, now a cap of Rs 2.5 lakh has been introduced, and the interest credited on the EPF account will be taxable when the PF contributions exceed the threshold limit specified by the government.
When to Submit the EPF Form 15G?
In the following situations, Form 15G may be submitted for a reduction in TDS burden:
- For requests for TDS exemption on fixed deposit interest payments of up to ₹40,000 in a particular FY, Form 15G must be submitted.
- Earning income from interest on bank deposits: As of FY 2019–20, banks must collect TDS annually from any individual whose interest on fixed deposits or recurring deposits exceeds a sum of ₹10,000. To avoid TDS deduction, one must submit 15G Form for PF in order to accomplish this.
- TDS on EPF or Employees Provident Fund Withdrawals: If an employee withdraws their provident fund before working for the present organization for 5years, TDS is required. One must still submit Form 15G and request an exemption even if their total taxable income (including the provident fund withdrawal) balance is zero but their gross taxable income is below the cutoff. It is applied to PF registration online
- TDS from interest on post office deposit – If a person satisfies all requirements for submitting Form 15G, the Post Office is required to accept self-declaration of this Form on post office deposits
- National Savings Certificates are also included in the scope of a claim under 15G. (NSC).
- If a person’s annual corporate bond and debenture revenue surpasses a particular threshold and TDS is applied. This therefore gives him or her the option to use form 15G.
- In addition to these, services offered through this form include exemption requests for LIC maturity and rental income.
Now Let’s Go Through Each Point in Part 1 of the 15G Form for PF
- 1 – Name of the person making the declaration
- 2 – The tax assessee’s PAN (Permanent Account Number). The declaration is regarded as void if someone doesn’t offer a legitimate PAN
- 3 – A person or a person may provide a status declaration (other than a company or a firm)
- 4 – The fiscal year to which the money in question relates
- 5 – Residential status, such as resident Indian or non-resident alien
- 6-14 – Your address and phone number
- 15(a) – If any assessment is subject to taxation in line with the provisions of the Income-tax Act of 1961, please answer ‘Yes’ to that question. Year out of the six evaluation years that came before the year the declaration was filed
- 15(b) – Indicate the most recent assessment year for which a tax return was submitted and processed
- 16 – The expected income covered by this disclosure. (Enter the EPF withdrawal amount you will receive. All that is included in this are the employee and employer contributions. The EPS and Pension should be left out of this
- 17 – Estimated total income for P.Y. (the current fiscal year), which includes the income specified in 16
- 18 – You must include the total number of Form No. 15G filings, as well as the entire amount of revenue for which said declaration(s) have been submitted, in the event that any declaration(s) in Form No. 15G are filed before submitting the new declaration within the Financial Year
- 19 – List the unique number of shares, term deposit and recurring deposit account numbers, National Savings Scheme numbers, life insurance policy numbers, employee codes, etc.
For Epf Withdrawal, for Instance:
- Your Provident Fund Account Number serves as your identification number
- Income Type: TDS on Withdrawals from EPF
- Article 192A
- Mention the amount of your EPF (Employer + Employee).
Filing of Form 15G
The Central Board of Direct Taxes, also known as the CBDT, has simplified tax filing by digitising the entire procedure. The steps for filing Form 15G online are shown below. It goes like this:
- By visiting the IT department’s official website, taxpayers must complete Form 15G online. For each declaration that taxpayers sign, the deductor is required by the CBDT, or Central Board of Direct Taxes, to provide a Unique Identification Number, or UIN.
- The person who is deducting the tax must provide the Income Tax Department of India with the necessary information regarding the UIN via the TDS statement, which must be submitted every three months.
Is Form 15G mandatory for PF withdrawal of less than Rs. 50,000?
According to the Income Tax Act, if a person withdraws less than Rs. 50,000 from their Provident Fund account, TDS shall not be deducted. Therefore, Form 15G is not mandatory for PF withdrawal of less than Rs. 50,000.
When the TDS is Applicable on EPF Withdrawal?
TDS is deducted at 10% on the EPF balance if withdrawn before 5 years of service, and the amount is above Rs. 50,000. If PAN is not provided at the time of withdrawal, TDS shall be deducted at a higher slab rate. However, TDS is not deducted if Form 15G/Form 15H is submitted, and the tax on the total income, including EPF withdrawal, is nil
When is the TDS not Applicable on EPF Withdrawal?
TDS is not applicable on EPF withdrawal if the individual has completed five years of continuous service, or if the total amount of withdrawal is less than Rs. 50,000. However, the interest earned on the EPF withdrawal is taxable as per the individual’s income tax slab rate.
FAQs:
1. Are there penalties for submitting a wrong or incomplete Form 15G?
Yes, there are penalties for submitting a wrong or incomplete Form 15G. If individuals falsely declare Form 15G to avoid tax deduction at source, they are punishable by fines or imprisonment under the Income Tax Act’s Section 277.
2. Is Form 15G applicable only for PF withdrawals or other withdrawals as well?
Form 15G is not only applicable for PF withdrawals but also for other withdrawals such as interest earned on fixed deposits, recurring deposits, and other investments.
3. What should be done if there are errors in the already submitted Form 15G?
If there are errors in the already submitted Form 15G, a new form can be submitted with the correct information. However, incorrect or incomplete information in the form can lead to penalties and prosecution under the Income Tax Act.
4. If I have multiple PF accounts, do I need to submit Form 15G for each?
Yes, if you have multiple PF accounts, you need to submit Form 15G for each account separately.
5. Can NRIs submit Form 15G for PF withdrawal?
No, NRIs cannot submit Form 15G for PF withdrawal. Form 15G is only applicable to resident Indians and Hindu Undivided Families (HUFs).
Conclusion
Remember that Form No. 15G or Form No. 15H are self-declaration forms that people can use to declare that their income is below the taxable threshold and that, as a result, no TDS should be deducted. According to the requirements of the Income Tax Act: https://incometaxindia.gov.in/pages/acts/income-tax-act.aspx, the ultimate tax on his estimated total income should be zero. The greatest legal services you are only a phone call away with Vakilsearch, with a team of knowledgeable business advisors and attorneys.
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