Form 15G, 15H is a self-declaration, which is provided by a person resident in India (not being a Company or Firm) to their deductor that the tax on his estimated total income of the previous year, in which such income is to be included in computing his total income, will be NIL. On the basis of such declarations in either Form 15G or 15H payments can be received without TDS.
Central Processing Unit (CPC) Bangalore in its recent communication dated 17-05-2014 has warned deductor for non deduction of income tax at source on the basis of Form 15G or 15H (by raising Flag-B) in quarterly TDS Statements.
As per CPC,
It is to be noted that as per
The area of concern for CPC appearsto be cases covered under section 197(1B) where deductor has not deducted tax at source on the basis of Form 15G even where the payments exceeded the maximumamount which is not chargeable to income-tax in the year.
However CPC in its communication seems to have completely overlooked the provisions of section 197(1C)
CPC Communication dated 17-05-2014
Dear Deductor ( TAN XXXXXXXXXX),
CPC(TDS) feels glad to provideyou with the new feature of downloading
Centralized Processing Cell(TDS) has observed from its records that
"The provisions of thissection
shall not apply
What is Form 15G/ H and itsrelevance :
Under section 197A of theIncome Tax Act 1961,
Form 15G / H is a self-declaration,
The Declaration is made in thefollowing Forms :
Form 15H - For Senior Citizens
Form 15G - For other thanSenior Citizens
Consequences, if deductorwrongly raises Flag "B" for Forms 15G/H :
This may be noted that