Issue – Form No.15G/15H is a form of declaration that has been prescribed for those persons who desire to receive certain specified income without deduction of tax at source. These forms can be used only if the aggregate income of the person making declaration does not exceed the maximum amount not chargeable to tax.
Form No.60/61 are used by persons who do not have a Permanent account number and who have entered into transactions specified under Rule
114B of the Income-tax Rule,1962.
The purpose of existence of these forms is mainly to avoid inconvenience to senior citizens and other persons who’s income chargeable to tax is below the maximum amount not chargeable to tax and those who do not have a PAN. These forms are however being misused, since there is no mechanism to track and control those persons who wrongly fill the form to avoid deduction of tax at source. Today, every branch of a bank collects Form No. 60/61/15G/15H and does not deduct tax at source on FDs having interest below 10,000. This gives a way to the assessee to have FDs in multiple branches with interest below 10000 and escape tax deduction at source by furnishing the relevant form.
Suggestions – Since there is no central system to locate multiple forms 60, 61, 15G and 15H, filled by a particular person, it is suggested that the filing of the same be made electronic. On the basis of particulars received from these form No, the banks should be mandated to punch the said particulars in the e-form which will generate a unique number. The details so furnished may be then used for analyzing and taking action against those persons who have given false declaration to avoid payment of taxes. This system if put in place will ensure genuine usage of these forms.
Source- ICAI Pre-Budget 2014 Memorandum on Direct Taxes