If you have any income at all throughout the course of a fiscal year, then such income is liable to be taxed in accordance with the provisions of the Income Tax Act of 1961. It is possible to generate an income from a variety of sources, including a wage, a business, financial gains, property, or even a residence. There is a notion known as TDS, which stands for “Tax Deducted on Source,” that applies to the many revenues that you could potentially make. The entity that is giving you the income first deducts the TDS from the amount of income that it is paying you, and it then pays the user the leftover amount.

The most frequent example is the interest that is earned on deposits by the bank and paid out to the customer. If you are under the age of 60 and have investment returns from bank deposits that really are greater than 40,000 Indian Rupees (INR) in a given fiscal year, then tax is withheld from the interest income. TDS would be withheld from the interest income of elderly people if it was determined that the annual total exceeded 50,000 Indian Rupees (INR) in any given fiscal year.

On the other hand, if your income isn’t really subject to taxation, you can utilize the 15G form to get rid of the appropriate deduction for tax withholding.

1. EPF withdrawal

If you intend to withdraw more than Rs. 50,000 from your Employees Provident Fund (EPF); before completing 5 years of continuous employment, you need to file either Form 15G or Form 15H in order to prevent having tax deductions taken from your withdrawal. Despite this, the amount that you take from your EPF should not go toward your taxable income at all.

2. TDS

To prevent tax deductions from being taken out of your interest income, you can file a declaration using either Form 15G or Form 15H. Form 15G is for those who are younger than 60 years old, whereas Form 15H is designed for people who are older than 60 years old. Only individuals who are exempt from paying tax on their total income and whose annual interest income does not exceed a certain threshold could indeed submit these forms. That threshold is Rs. 2.5 lakh for individuals who are not senior citizens, Rs. 3 lakhs for senior citizens, as well as Rs. 5 lakhs for super senior citizens.

3. Insurance premiums

Whereas if proceeds from the maturity of your insurance contract are much more than 1 lakh Indian rupees (INR), as well as the premiums that you paid, were much more than 10 percent of the total covered, then the proceeds from the maturity of your policy are taxable. The whole amount generated from the life insurance payout is subject to a TDS deduction equal to five percent of that amount. If you have not yet sent in your application for a PAN card, the TDS rate will be increased to 20%.

4. For insurance commissions

When you’re an insurance agent who earns a commission that is equal to or greater than 15,000 Indian Rupees (INR) on an annual basis, the insurance company is required to collect TDS from such commissions. If you have no tax due for the current fiscal year, you could get relief from having TDS deductions taken out of your paycheck by submitting either Form 15G or Form 15H to the insurer.

Conclusion 

In the event that you have not submitted Form 15G or Form 15H, as well as the banker has charged TDS on Interest, you do not have to be concerned since you may always file a claim for a TDS refund for such TDS that was deducted inside an amount that is greater than your income tax liability.