New Delhi: The Central Board of Direct Taxes (CBDT) has extended the validity of forms 15G and 15H by three months to June 30, 2020 and prevent banks from deducting TDS on interest income of individuals. No TDS on interest income is another relief for taxpayers.
As per an order issued by the CBDT late on Friday, if a person has submitted valid forms 15G and 15H to the banks and other institutions for financial year 2019-20, then these forms will be valid up to June 30 for FY2020-21 also. The banks, however, would have to report payment or credits in the TDS statement for quarter ending June 30, as per the law.
The relaxation for taxpayers has been given as there is severe disruption in normal working hours of almost all sectors of the economy, including banks due to Covid-19 pandemic. Amid such situation there can be instances that some eligible persons are unable to submit the forms in banks required to prevent TDS on interest income. This could have resulted in a situation where tax is deducted from an individuals interest earning even if there was no tax liability during the difficult period of lockdown.
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Form 15G and Form 15H are forms you can submit with a bank to prevent TDS deduction on your interest income. These forms are normally submitted at the beginning of the financial year. This ensures the bank does not deduct any TDS on your interest income. Most banks deduct TDS every quarter.
Apart from interest income on bank instruments, TDS also applies on EPF withdrawal, income from corporate bonds, on post office deposits, on rent, and on insurance commission.
CBDT has issued notification for easing the process of issuing certificates for lower rate/nil deduction/collection of TDS or TCS with respect to financial year 2019-20.
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Union Finance Minister Nirmala Sitharaman last month had announced the extension of the deadline for filing income tax returns and Goods and Services Tax- GST returns till June 30. Furthermore, the government has reduced charges for digital trade transactions and ATM cash withdrawals to promote online financial transactions at the time of the COVID-19 pandemic.
FM Sitharaman had extended the GST return filing deadline for March, April and May 2020 till June 30, 2020. Addressing the media through a video conference, FM had said that the deadline for filing composition returns had also been extended till June 30.
(With Agency Inputs)
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