Note: Above mentioned information is to the best of our knowledge. We do not take any responsibility of accuracy and completeness of information. Read issue documents for further information.
Important
The Union Budget 2023 has introduced a significant modification that will have an impact on investors who engage in transactions related to listed debt securities. Starting from April, a Tax Deducted at Source (TDS) will be imposed on the interest income earned from listed bonds. With the inclusion of listed bonds under the TDS framework, any entity earning interest income from such bonds will have tax deducted at the source by the issuer at the time of payment. Moreover, this development brings transparency to the system, as the deducted tax will be clearly reflected in the taxpayer's Form 26AS statement, thus providing a comprehensive overview of their tax obligations.
Features of Form 15G and 15H
Self-Declaration
Form 15G and Form 15H are classified as self-declaration forms rather than certificates.
For Individuals only
Form 15G is for individuals below the age of 60 years and 15H is for above 60 years of age, who can seek exemption from TDS on certain types of income. It can be submitted by resident individuals or person (not being companies or firm).
Not subject to Tax Deduction
The TDS requirement does not apply to Government Bonds, which also includes Sovereign Gold Bonds. This exemption ensures that individuals who invest in these bonds are not subject to tax deduction at source.
For Indian Residents only
Individuals who are non-residents (NRIs) are ineligible to avail themselves of the advantages associated with these particular forms. Form 15G and 15H can only be utilized by individuals categorized as 'residents.'
In case of corporate bonds, TDS is deducated when the interest income surpasses Rs 5,000 per annum. To prevent this deduction, you have the option to submit either Form 15G or Form 15H directly to the bond issuer. By doing so, you formally request that the TDS (Tax Deducted at Source) not be deducted from your payment. It is recommended to promptly fill out either Form 15G or Form 15H at the commencement of the financial year.
Where can one submit Form 15G or Form 15H?
If you possess listed debt securities and meet the eligibility criteria, you have the option to send an email to the registrar responsible for the specific issue. The email should include the necessary forms/documents as attachments.
Submission Requirements for Form 15G and Form 15H
15G
Conditions
15H
Individual or person (not being companies or firms)
Eligible Entities
Individual or person (not being companies or firms)
Indian
Residential Status
Indian
Less than 60 years
Age Limit
Aged 60 years and above or will turn 60 during the relevant financial year
Tax calculated on income should be NIL
Tax Liability
Tax calculated on income should be NIL
Total income after claiming deduction for the year must be below the basic exemption limit of that year which is Rs.2.5 lakh
Total Income
Total income for the year must not be taxable after claiming deduction and rebate u/s 87A
Interest Income should not exceed Rs.2.5 lakh
Total Interest Income during the financial year
Total income including interest income for the year must not be taxable after claiming deduction and rebate u/s 87A
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