Form 15G/H is a type of declaration to be filed by an individual/a person not being a company or the firm in order to receive certain payments like dividends, interest on securities, interest other than interest on securities, national saving schemes, and interest on units without deduction of tax at source (TDS).
Generally Banker’s advice depositor’s to Fill Form 15G/H whenever new FD is done so that banker’s save themselves from liability of deducting TDS as per IT Act. Customer/depositor will be happy to fill Form 15G/H as to avoid tax. Both are acting without knowing implication of wrong declaration of this Form.
Form 15G/H is a boon for the person whose Taxable Income is less than the maximum amount which is not chargeable to income tax. It is a boon for him because he will receive certain payments like dividends, interest on securities, interest other than interest on securities, national saving schemes, interest on units without deduction of tax at source (TDS) by the banker.
But Form 15G/H becomes a Suicide form for the people who had signed & given to banker may be wrongly guided/pursued by manager if he has Taxable Income in that year.
POINTS TO BE NOTED WHILE MAKING DECLARATION USING FORM 15G/H:
1) Quoting of PAN is mandatory from 01/04/2010.
2) Declaration should be made at the beginning of each financial year and separately for each branches where the has been made.
3) The declaration should be made in two copies, one of which is forwarded to the Income Tax Department so that the IT Authorities can make further enquiries regarding the same income.
4) These form’s are not applicable for NRI’s.
IMPACT FOR WRONG DECLARATION:
Impact of wrong declaration will attract section 277 of Income Tax Act 1995 which says as under:
277. 2. False statement in verification, etc. If a person makes a statement in any verification under this Act or under any rule made there under, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable: –
(a) in a case where the amount of tax, which would have been evaded if the statement or account had been accepted as true, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;
(b) In any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine.