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Thursday, June 6, 2013

Banks need to issue acknowledgement slip while receiving form 15G and 15H

Reserve bank of India sees some cases where the customers gives form 15G and 15H to the bank but still banks deduct the TDS. This is due to the lack of management as well as lost the papers practice of the banks. In this reagrd, RBI has advised the banks to issue acknowledgement slips to the customers while receiving forms 15G and 15H. 

These forms are the declaration form stating that the income is not the above of threshold limit and hence no TDS will be deducted on the interest earned by the banks. 

Reserve bank of India has issued a note no. 100 dated 31 May 2013 regarding this issue. Full note is as under.

Acknowledgement by banks at the time of submission of Form 15-G / 15-H
As you are aware banks are not required to deduct TDS from depositors who submit declaration in Form 15-G/15-H under Income Tax Rules, 1962. However, it has been brought to our notice that despite submission of Form 15-G/15-H by customers, banks are deducting tax at source, at times, causing inconvenience to customers resulting in a number of complaints.  Such instances arise because either the forms are misplaced or a track is not kept of forms received in the branches.

2. The matter has been examined by us in consultation with Indian Banks’ Association (IBA). With a view to protect interest of the depositors and for rendering better customer service, banks are advised to give an acknowledgment at the time of receipt of Form 15-G/15-H. This will help in building a system of accountability and customers will not be put to inconvenience due to any omission on part of the banks.
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