3. Where No TDS is to be Deducted under Section 194DA
(A) When Payment in respect of Life Insurance Policy ( under Section 194DA) does not exceed Rs. 1,00,000:
No deduction under section 194DA shall be made where the amount of such payment or, as the case may be, the aggregate amount of such payments to the payee during the financial year is less than Rs. 1,00,000.
(B) Where a Self Declaration under Form No. 15G/15H is furnished by the Employee [Section 197A(1A), (1B) and (1C)]:
The employee may furnish a declaration in writing in duplicate in new Form No. 15G to the payer to the effect that there is no tax payable on his Total Income. In this case, the payer shall not deduct any tax at source.
However, as per section 197A(1B), the assessee cannot furnish the declaration under this clause if the aggregate amount of the following incomes credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the maximum amount which is not chargeable to tax:
- Payment from accumulated balance of recognized provident fund, if taxable.
- Interest on securities
- Interest other than interest on securities
- Payment in respect of life insurance policy, if taxable.
- Insurance commission
- Payment in respect of deposit under National Saving Scheme
- Payment in respect of rent.
Notwithstanding anything contained in section 197A(1B), above, no deduction of tax shall be made from the above incomes in the case of an individual resident in India who is of the age of 60 year or more at any time during the previous year, if such individual furnishes to the payer, a declaration in writing in duplicate in Form No. 15H to the effect that the tax on his estimated total income of the previous year in which the above income is to be included in computing has total income will be NIL.
In the case of such senior citizen, the income from the above sources can be more than the maximum amount which is not chargeable to tax but the tax on his estimated total income, inclusive of such incomes, should be NIL.
As per section 206AA(2), declaration under Form No. 15G or 15H shall not be valid if it does not contain the permanent account number of the declarant. In case any declaration becomes invalid, the deductor shall deduct the tax at maximum marginal rate.
The payer of the income is required to deliver to the Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner one copy of declaration given under new Form 15G on or before the 7th day of month next following the month in which the declaration is furnished to him.