What To Do If Bank Deducts TDS On Fixed Deposits Despite Furnishing Form 15G/H?

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Form 15G or Form 15H that is to be filed as a declaration to be entitled to receive certain payments including interest on securities, interest other than interest on securities, on some financial units, national saving schemes, dividends without deduction of tax at source.

What To Do If Bank Deducts TDS On Fixed Deposits Despite Furnishing Form 15G/H?

The said forms can be filed by a person or an individual which also includes HUFs and Association of Persons in its scope to file the form. The form has to be generally furnished at the start of a financial year.

For the same, the apex body of the bankers, RBI has asked banking concerns to hand over an acknowledgment to depositors on receiving Form 15G or Form 15H. The step was to taken to make the entities more accountable for their tasks.

Despite the directive to acknowledge Form15G or 15H, banks are still found to deduct tax on deposits- What recourse you have now?

Though the apex body has asked banks to give an acknowledgement on the receipt of form 15G or form15H, the underlying purpose of no tax deduction at source on deposits is not met in certain cases. And due to technical glitches or human error, bankers have been still found to deduct tax at source on deposits. More so, when customers approach banks for wrong TDS and ask for their refund, banks cite reasons such as computer errors and refuse to make the refund saying that the tax has already been remitted to the government, so you as a depositor can now claim it by filing your return from the IT department.

From the end of RBI, still there has been no remedy other than the partial directive to provide acknowledgement for Form 15G or Form 15H. However, depositors should not be made to suffer for the errors committed by the bank or its workforce. Immediate refund for wrong TDS together with the interest for the financial loss to the depositor should be initiated.

Inconvenience meted out to the depositor should be compensated with some compensation amount being credited to the depositors account as then such deductions shall be done carefully in future. Also, a penalty for the delay in re-crediting of the tax amount wrongly deducted should also be payable by the banks on the daily basis. These and other similar steps if taken by the RBI shall check upon wrong deduction of TDS on deposits by the banking entities.

Nonetheless, as a banking customer you can always seek a redressal of your grievance from the banking ombudsman or write to the higher authorities of the banking concern for a quick remedy to your problem.

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Read more about: fixed deposit, taxes, tax, tds, form 15g, form 15h
Story first published: Friday, June 2, 2017, 11:43 [IST]
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