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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Debt Products

Ms. Kavita Rao, a resident individual, receives interest of Rs 60,000 during the year on a company fixed deposit, and the company deducts TDS under the applicable section. Her total income is below the basic exemption limit. Which step lets her avoid or recover TDS on this interest?

She can submit Form 15G, or 15H if a senior citizen, before the interest is paid so that no TDS is deducted, provided her tax liability is nil. If TDS is already deducted, she claims a refund by filing her income tax return.

  1. ASubmit Form 15G/15H to the payer in advance, if eligible, or claim a refund by filing a returnCorrect
  2. BTDS can never be recovered once deducted
  3. CAsk the company to treat it as capital gain
  4. DPay advance tax on it instead

Explanation

An eligible person whose tax liability is nil can submit Form 15G (or 15H for seniors) to prevent TDS. If TDS was already deducted, the excess is claimed as a refund by filing the income tax return. The other options misstate the treatment.

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