As per a CBDT notification, form 15H has been amended and now senior citizens with taxable income up to Rs. 5 lakh can claim TDS exemption in lieu of interest on their deposits with bank and post offices. It is to be noted for TDS exemption claim, earlier the limit was set at Rs. 2.5 lakh.
To implement the budget announcement, the CBDT has issued a notification announcing changes made to Form 15H and asked banks and other financial entities to accept from 15H from senior citizens whose liability of tax comes as nil after taking into account rebate provided under section 87A of the Income-tax Act, 1961.
Senior citizen assessees aged above 60 years at the start of the financial year need to deposit form 15H to ensure no TDS is deducted for interest earned on deposits.
In the interim Budget 2019, for individuals earning up to Rs. 5 lakh, the rebate under section 87A has been increased from erstwhile Rs. 2500 to Rs. 12,500, which brings liability of such taxpayers to be nil.
"Had this change not been brought, taxpayers earning income up to ₹5 lakh would have suffered TDS on interest from banks and would have had to file a tax return to claim a refund of such TDS", Nangia Advisors (Andersen Global) Executive Director Neha Malhotra said.