Regarding 80C and form 15G and 15H, Net income from FD Interest so can i file form 15G and use 80C and 24(A)

POSTED BY ram ON October 20, 2011 3:23 pm COMMENTS (3)

My mother is 63 years old, She had taken home loan and paying its installments for interest form fixed deposits. Total Interest earned is 4 Lakhs this year,

Amount Paid to the Loan as base Section 80C : 100000
Amount paid as interest 24(A): 150000
Net income after these 80C and 24(A) deduction is : 1.5 which is below 1.9(base income tax slab for female)

But the bank is deducting TDS , so she can submit form 15G(this year) / 15H(next year) so as to avoid TDS deduction.

Thanks,

Ram

3 replies on this article “Regarding 80C and form 15G and 15H, Net income from FD Interest so can i file form 15G and use 80C and 24(A)”

  1. ashal jauhari says:

    Dear Ram, SEction 80C calculations are allowed while filing form 15H but section 24 (Home loan interest benefit) is not allowed.

    Hence after 80C benefit, your mother’s income from bank FDs ‘ll remain 3L Rs. & bank ‘ll deduct TDS.

    Thanks

    Ashal

  2. ram says:

    Thanks Ashal for your help.

    My mother is already senior citizen and tax slab is 2.5
    There is a house lone she had taken. 1lakhs rebate under 80C and 1.5 rebate on interest under section 24(A)

    So here net taxable amount will be 4 – (1 + 1.5) = 1.5, which is under tax slab of 2.5
    So her net tax liability will be Nil (Zero tax limit)

    I think now that she can file form 15H to save TDS. (While still keeping every thing in same bank)

    Am i correct in this please let me know?

    Thanks,
    Ram

  3. ashal jauhari says:

    Dear Ram from the current FY i.e. 2011-2012, your mother is already a Sr. citizen (age reduced from 65Y to 60Y). Hence the applicable zero tax slab to her ‘ll be 2.5L Rs. & form ‘ll be 15H.

    Out of Interest income of 4L Rs. she is eligible to claim 80C benefit for tax calculation purpose while filing form 15H. So 4L – 1L = 3L, which is higher than the zero tax limit of a Sr. citizen. Hence Bank is liable to apply TDS.

    Your mother may file her Income Tax return & may claim refund for the adjustment of home loan interest also for the over all income.

    Alternatively – a practical & simple solution, split the amount in 2-3 banks so that the total interest earned from a bank remains lower than the 2.5L Rs. limit & your mother can easily file now form 15H to save TDS.

    Thanks

    Ashal

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