ITR filing: Deduction of TDS on interest income and how to avoid it

The current provisions for Tax Deduction at Source (TDS) apply to various types of payments including salary, interest, brokerage, commission, professional fees, royalty, and more. However, if the total amount of interest credited or paid to the payee for time deposits during the financial year does not exceed Rs 40,000, then no tax is required to be deducted. In case of senior citizens, the threshold stands at Rs 50,000.Any individual who has a bank account and earns interest on their deposits is subject to paying taxes on this income. It is important for those who receive interest income from their bank accounts to be aware that taxes are to be deducted at the time of payment or credit of interest, whichever comes first, as per section 194A.Taxpayers can avail a significant benefit by avoiding TDS on income like interest and rent, if their annual taxable income falls below the tax exemption threshold. This can be done by submitting Form 15G or 15H to the appropriate person or organisation. Form 15G is applicable for individuals below 60 years of age, while Form 15H is for individuals who are 60 years of age or older. These forms are useful when the taxpayer’s interest income falls below the specified limit and they wish to avoid TDS.Submitting Form 15G/15HThe taxpayer who receives declarations in the form of Form 15G or 15H will need to upload the details of such declarations on a quarterly basis on the e-filing website (www.incometax.gov.in) using their digital signature. The deadlines for uploading the details are as follows:

1. Within 15 days from the end of the first, second, and third quarters.
2. Within 30 days from the end of the fourth quarter.

Important points to keep in mind

1. A declaration using Form 15G or 15H can be submitted if the total annual interest does not exceed the applicable exemption limit, which is Rs 2,50,000, Rs 3,00,000, or Rs 5,00,000, depending on the specific case.
2. This requirement does not apply to senior citizens. If a resident senior citizen expects that the annual interest to be paid to them will exceed the exemption limit of Rs 2,50,000 or Rs 5,00,000 (depending on the specific case), they can still submit a declaration using Form 15H. This can be done as long as the tax payable on their total income, after considering the rebate under section 87A, is nil.
3. Only individuals who are residents of India are eligible to make a declaration using Form 15G or 15H.
4. The total income tax liability for the year should be zero.

Read all the Latest News, Trending News, Cricket News, Bollywood News,India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.