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Many people don't like when it's time for a tax payment, especially if they have to pay a sizable quantity of money. The thought of strategies to save on taxes immediately comes to mind at that time.

Although there are many ways to reduce your tax burden, bank FDs are one of them. You can file a statement with the deductor for the non-deduction of tax on interest in form 15G. That implies the bank won't deduct TDS (Tax Deducted at Source) on interest from FDs if you aren't in the income tax bracket. Please keep reading to learn more about form 15G, why you need it, and how to fill form 15G.

What is Form 15G?

Form 15G is a self-declaration form that states that your income is below the basic exemption level and that TDS should not be deducted from the interest income from FDs. So, using Form 15G, you can ask the bank to stop deducting TDS on the interest on your fixed deposit if your total income is below the basic exemption amount. 

The total income listed on the form is the net taxable income for which the expected total tax due by the taxpayer is zero. Only if a person has no tax liability should they submit this form. Gross total income is the sum of all sources of revenue received by the payer. Net taxable income is the amount of income that remains after all relevant tax breaks are deducted from the total gross income.

When Do You Need Form 15G?

  1. This form is needed when individuals under the age of 60 are required to file Form 15G as a self-declaration that because their income is below the taxable threshold, no TDS should be deducted from the salary credited to their account.
  2. You can easily withdraw the PF amount online by completing an EPF (Employees' Provident Fund) form 15G. 
  3. The most significant benefit of filling out this form is avoiding TDS.

Rules of TDS (Tax Deducted at Source) on EPF (Employees' Provident Fund) Withdrawal

Section 192A of the Finance Act of 2015 states that if you take more than Rs. 50,000 from your EPF account and haven't worked for five years, TDS (Tax Deducted at Source) would be applied. The earlier limit on such TDS was for withdrawal amounts of more than Rs. 30,000, and the limit was increased to Rs. 50,000 in the 2016 budget. Forms 15G and 15H, the senior citizens' version of Form 15G, are now formatted by CBDT guidelines (Central Board of Direct Taxes).

How to Complete Form 15G for PF Withdrawal?

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Let's move on to learning how to complete Form 15G for an online EPF withdrawal now that you understand what Form 15G is and how TDS requirements apply to EPF.

  • Members should log in to the EPFO UAN Unified Portal.
  • Select “Claim” from the ONLINE SERVICES option (Form 31, 19, 10C).
  • Verify your bank account's last four numbers.
  • Click Upload form 15G.

A List of Requirements for Filing Form 15G

  • You are not a corporation or a business; you are an individual.
  • The appropriate financial year requires that you be an Indian resident.
  • The minimum age you should be is 60.
  • Tax liability for the financial year is zero when computed on the entire taxable income.
  • The total amount of interest income is below the basic exemption ceiling for the fiscal year.

Penalty for Using Form 15G to Submit a Fraudulent Declaration

  • According to Section 277 of the Income Tax Act of 1961, making a false declaration on Form 15G only to avoid TDS may result in penalties and jail time. 
  • If the incorrect statement was submitted to dodge a tax payment of more than 1 lakh, you could get imprisonment for six months to seven years.
  • For all other situations, a sentence of three months to three years in jail.
  • Therefore, you should consider submitting Form 15G only if you are qualified to do so rather than making a fraudulent declaration.

Things to Remember When Filling Out a Form

  • Go through all the information once to check if you are eligible or not.
  • Check your form twice to check if it is error-free.
  • Make sure the assessment year is correct.
  • A PAN card copy must be needed when you fill out the form.
  • Don't forget about taking the slip.

Conclusion

Regarding reducing the TDS load, Form 15G is often quite beneficial. However, under Section 277 of the Income Tax Act of 1961, making a false declaration in Form 15G to avoid TDS might result in a fine or perhaps jail time. The person who will deposit the tax withheld at source to the government on behalf of the tax assessee, or the deductor, must fill out a second section of the form. You can find how to form 15 G guidelines quickly.

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