Eligible taxpayers can submit form 15G to avoid TDS on FD

Finance ITR Filing

My FD interest is less than 5 lakh. Am I exempt from TDS if I submit form 15G for every financial year? 

– Name withheld on request

We presume that you don’t have any income other than interest earned from fixed deposit (FD).

Since your interest from FD is below the tax exemption threshold of 5 lakh, your tax liability will be zero and by filing Form 15G with your bank, you will be exempt from tax deducted at source (TDS) with respect to your interest income.

However, if you have any income other than FD interest which may push your total income in the said financial year above 5 lakh threshold, then you need to assess your tax liability and pay tax as per the applicable tax slab. In such case, where you have any income tax liability, filing Form 15G may not be helpful and if TDS is not deducted by bank and you default/ delay in paying advance tax, interest may be charged from you at the rate of 1% per annum (subject to exact calculations).

– Shailesh Kumar, Partner, Nangia & Co LLP.

Source: livemint

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