Income Tax department has issued a notification regarding an amendment for change in Form 15H dated 22.05.2019 under which a clarificatory type note has been added under the notes.
Form 15H is a Declaration ,which can be filed by senior citizen under sub-section (1C) of section 197A of the Income-tax Act, 1961, claiming certain receipts without deduction of tax.Like if a senior citizen is earning interest from bank deposit then to avoid TDS on interest on Fixed deposit ,he may file form 15H to bank subject to some conditions.
In this form there is ambiguity ie in main declaration person was asked to certify that his tax liability during the year remain nil.
However as per Note 10 of the form, Deductor was asked not to accept the form if the income of the senior citizen after deduction under chapter IV is more than maximum amount which is not chargeable to tax.(reproduced in image below)
So confusion was here that if income of a senior citizen is more than exemption limit after deduction but due to rebate under section 87A his tax liability is nil, in that case whether he is eligible to submit the form 15H ?
To remove this confusion ,Now a new proviso has been added under note 10 of the Income tax form 15 H as under
“Provided that such person shall accept the declaration in a case where income of the assessee, who is eligible for rebate of income-tax under section 87A, is higher than the income for which declaration can be accepted as per this note, but his tax liability shall be nil after taking into account the rebate available to him under the said section 87A.”.
Though we are always advising our readers the position coming after the proviso even before the release of the notification as mandate is given form the act and error in drafting the form can not and should not be hurdle to claim the benefits allowed by the act.However clarification insertion is welcomed.