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Since 1st March, 1999
 
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Q&A
Time check
Is there any time limit for submitting Form 15H to the post office for Senior Citizen Saving Scheme? Is it required to submit Form 15H as in the budget for
2008-09 it was declared that no tax would be deducted for this scheme?
Ajit Kumar Das, Howrah
 
Through Form 15H one declares that he/she doesn’t have any taxable income and hence no tax should be deducted at source on interest income. A bank or a post office is required to deduct tax at source on interest income in excess of Rs 10,000 a year at the time of paying the interest to the depositor’s account. So, if you don’t submit Form 15H at the beginning of a financial year, that is, in the first week of April every year, the bank or post office will deduct tax on the interest payable on your deposit. As regards the Senior Citizen Savings Scheme, the budget has made this scheme eligible for tax benefits under Section 80C of the Income Tax Act. This means that one can claim a deduction up to Rs 1 lakh from one’s taxable income towards deposits made in the Senior Citizen Savings Scheme in 2008-09. The interest income on Senior Citizen Savings Scheme continues to be taxable and one should submit Form 15H if the total interest income during a financial year is more than Rs 10,000.
 
 
Tax jolt
Is TDS applicable to interest income above Rs 10,000 in government bonds (taxable) in 2008-09? I had purchased those bonds from the Bank of Baroda and the bank had not deducted tax at source from 2005 till date. Will the bank accept Form 15H this year?
S. Mukherjee, Garia
 
The decision to deduct tax at source from the financial year 2007-08 for the Government of India Savings Bonds if interest during a year exceeds Rs 10,000 is a big blow to many retired people who have invested substantially in these bonds. To avoid deduction of tax at source, one has to submit Form 15G/15H declaring that one has nil tax liability during the year.
 
 
If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: btgraph@abpmail.com, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001.
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