The Hindu Business Line : Finance Ministry clarifies on TDS on senior citizens' income

The Finance Ministry on Friday clarified the issue relating to deduction of tax at source on income received by senior citizens. On furnishing of certain declarations to the bank or post office, no deduction of tax shall be made by them, the Ministry said.

For individual residents in India aged 65 and above, a declaration is required in Form 15H to the bank or post office if the tax on his estimated income for the financial year is nil, said an official release.

For citizens below 65, a declaration in Form 15G can be furnished by a depositor if the tax on his estimated total income for the financial year is nil and the aggregate amount of interest credited or paid (or likely to be credited or paid) during the financial year is not more than the maximum amount, which is not chargeable to tax (Rs 1 lakh for male taxpayers and Rs 1.35 lakh for a women), it added. It noted that both the above conditions are required to be fulfilled.

The information relating to deposits under the Senior Citizens Savings Scheme, 2004 may be given by the depositors in Schedule III of Form 15-G.

Tax Deduction

The release added that in suitable cases a certificate for lower deduction or no deduction of tax at source under section 197(1) may also be obtained by the depositors from their assessing officers.

The Ministry said that banks and post offices have been advised that such portion of the tax not deducted by them during 2004-05 and 2005-06, which has been paid directly by the depositors as advance tax or self-assessment tax or otherwise, and for which necessary evidence is furnished by the depositors to the bank/post office, will not be recovered by the Income Tax Department. Similarly, to the extent of the amount for which declarations in Forms 15H and 15G as well as certificates under section 197(1) are available with the banks or post offices, the Department would not recover from the bank/post office.

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