TDS on Interest on Bank Deposits-Latest Provisions and Furnishing of 15G/15H Wef 01.04.2019,

TDS on Interest on Bank Deposits-Latest Provisions and Furnishing of 15G/15H
Wef 01.04.2019, as per Sec 194(a) of Income Tax act, Limit for TDS on Interest on Bank Deposits raised to -Rs40,000/- from Rs 10,000/-( Finance Act 2019). For Senior Citizens the Limit is Rs 50,000/-( Increased last Year).
Banks would deduct TDS at 10 %  on Interest on Deposits, if the annual aggregate accrued/payable/paid interest exceeds the limit of Rs 40,000/-Rs 50,000/-. The limit is per Bank per Financial Year.( @ 20% if  PAN is  not furnished)
An individual can seek exemption from this Tax deduction at Source, by furnishing 15G/15H, if he estimates that his/her Income Tax liability would be Nil for the Current FY.
Important Points are
1. 15H is meant for Senior Citizens of age 60 years and above. 15 G is meant for others, below 60 Years. PAN is mandatory.
2. If a person estimates that his annual Income Tax Liability would be Nil, he/she can furnish 15G. After availing all eligible deductions like Standard Deductions Rs50,000/- 87 A, 80 C , Loss on House property , if his/her aggregate annual income , including Salary/Bank Interest falls below Rs 250,000/- he/she can file 15G. The only Condition is that aggregate deposit interest itself should not exceed Rs 250,000/-If the deposit interest per annum exceeds Rs 250,000/-, Banks can not accept 15G , though the depositor pleads that after availing all deductions his/her tax liability would be Zero.
Example-
a.   Annual Salary Income-Rs 300,000 and annual Deposit Interest is Rs 240,000/- He is eligible to furnish 15 ,G as after availing standard deduction of Rs 50,000/- and rebate under Sec 87A as his tax liability would be Nil.
b. If the annual Salary income is Rs 240,000/- and annual interest is Rs 260,000/-, Bank cannot accept 15G , as his interest income is exceeding Rs 250,000/- though his tax liability would be Nil.
3. In case of Senior Citizens, there is a concession. Irrespective of Interest income , even if it exceeds Rs 300,000/- Bank can accept 15 H, if the Depositor declares that his tax liability would be Nil after taking into account all eligible deductions. Example-
a. In case of  Senior Citizens, if the  estimated annual Interest income is Rs 310,000/- and Pension Income is 280,000/- Bank can accept 15 H as the Tax liability would be nil( Total income Rs 590,000/- -Std Deduction Rs 50,000 -Sec 80 TTB Rs 50,000= Rs490,000/-. IT liability would be Nil after Rebate under Sec 87 A as the Net Income falls below Rs 500,000/-) . Here Bank can accept 15H, even if the annual interest exceeds Rs 300,000/-
4.  Bank to verify PAN and the estimated annual interest income.  In case of 15 G, If the Interest income exceeds Rs 250,000/- Bank cannot accept 15 G. There is no other responsibility cast on the Banker to verify the   Savings Proof , amount of deductions under 80 C, 80 D ,Salary/Pension or any other income. Bank is bound to go by the declaration of income furnished in the respective columns of 15G/15H.
5.   Any person furnishing false statement in the declaration is liable for prosecution and on conviction , it is  punishable with rigorous imprisonment. Also any interest declared under 15G/15H would be available in income Tax Department data base and would be available in 26 AS. Any person filing IT return omitting this income / not filing return is liable to receive notice from Income Tax Department.
6. 15G/15H has to be furnished at the beginning of each FY to get exemption of TDS.  Acknowledgment for receipt of 15G/15H will be provided by the Bank.
7. Bank to issue Certificate for Tax deduction at Source  in F16A ,after the end of each quarter.
8. TDS is only a provisional Tax Recovery. In case if the actual Tax Liability of the Assessee is Nil or Less he/she can claim refund of Tax Deducted while filing ITR.  Liability of the Depositor is not completed with deduction of TDS. He has  to pay further Tax if any on total income including interest income.
9.  Even if the person’s Tax Liability is Nil after availing all deductions and rebate under Sec 87A ( Net Income below Rs 5 Lakh –Tax liability-Zero) , it is mandatory to file ITR ( Income Tax Returns), if the individual’s total Income Exceeds Rs 250,000/-( others)/Rs 300,00/-(Senior Citizen). with in the due dates.( Sec 139). Failure will attract levy of penalty. (234F).