CBDT amends IT Rules to allow declaration in Form 15H for payment of certain income without TDS from a senior citizen whose income is higher than the basic exemption limit but is eligible for Section 87A rebate, where tax liability shall be nil after taking into account such rebate.
This amendments has been made to provide relief to senior citizens, in view of the fact that a payer was not allowed to accept declaration in Form 15H where the amount of income exceeds the maximum amount not chargeable to the taxpayer. In such cases the payer was required to verify the declarant’s income in Form 15H to determine eligibility for rebate under Section 87A. Now he can proceed with no TDS, based on declaration in Form 15H.
CBDT Press Release dt. 24/05/2019: Amendment of Declaration Form 15H for allowing Section 87A rebate to Senior Citizens
Sub-section (1C) of section 197A of the Income-tax Act, 1961 (the Act) read with rule 29C of the Rules, inter alia, provides that no deduction of tax shall be made in case of a resident individual, who is of the age of sixty years or more, if he furnishes a declaration in Form 15H to the person responsible for paying any income of the nature referred to in section 192A, 193, 194, 194A, 194D, 194DA, 194EE, 194-I or 194K, to the effect that the tax on his estimated total income will be nil.
Further, Note 10 to Form No 15H provides for non-acceptance of declaration if the amount of income of the nature referred to in section 197A(1C) or the aggregate of the amounts of such income 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 after allowing for deduction(s) under Chapter VIA, if any, set off of loss, if any, under the head “income from house property” for which the declarant is eligible.
Section 87A of the Act has been amended vide Finance Act, 2019 which provides that a resident individual, having total income up to Rs. 5 lakh, shall be entitled to a rebate of an amount being the amount of tax chargeable or Rs. 12,500/-, whichever is less.
However, at present, the note 10 of Form 15H does not take into account the maximum allowable rebate of Rs 12,500/- provided under section 87A as above, which is available to the assessee in respect of the tax calculated on income, there could be cases, where, though income of the assessee would be above the minimum amount chargeable to income-tax, tax liability may be nil after taking into account the rebate available under section 87A. Deduction of tax in such cases may cause undue hardship to senior citizens.
Accordingly, Income-tax Rules, 1962 have been amended by way of insertion of proviso in Note 10 of Form No 15H and have already been notified vide Notification No G.S.R. 375(E) dated 22/05/2019, so as to provide that the person responsible for paying the income referred to in column 15 of Part I shall accept the declaration in the case of the assessee, being a senior citizen, who is eligible for rebate of income-tax under section 87A, and his/her tax liability is nil after taking into account this rebate.
CBDT Income Tax Notification 41/2019 dt. 22/05/2019: CBDT amends IT Rules to modify Declaration Form 15H for allowing Section 87A rebate to Senior Citizens
G.S.R. 375(E).- In exercise of the powers conferred by sub-section (1C) of section 197A read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. Short title and commencement.-
(i) This rule may be called the Income-tax (4th Amendment) Rules, 2019.
(ii) It shall come into force from the date of its publication in the Official Gazette.
2. In the Income-tax Rules, 1962, in Appendix II, in Form No. 15H in Part II, in note 10, the following proviso shall be inserted, namely:-
“Provided that such person shall accept the declaration in a case where income of the assessee, who is eligible for rebate of income-tax under section 87A, is higher than the income for which declaration can be accepted as per this note, but his tax liability shall be nil after taking into account the rebate available to him under the said section 87A.”.
Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number S.O. 969(E), dated the 26/03/1962 and were last amended vide notification G.S.R. No. 304(E), dated 12/04/2019.