Income Tax Rebate under section 87A from financial year 2013-14

Section 87 A of the Income Tax Act, 1961 was introduced in Finance Act, 2013 to give benefit to low income group of people whose net total income is less than Rs. 5,00,000/-. The rebate under this section is available to resident individuals from A.Y. 2014-15 and financial year 2013-14.
The rebate available is maximum of:

  1. 100% of tax payable on total income or
  2. Rs. 2,000/-.

This need to be claimed while filing the return as employers cannot give this benefit as it is not covered by sec.192(2A). This section employers to give relief under sec.89(1) arrear after obtaining declaration form in form 10 E. But most software companies allowed this deduction in employer’s module. Even the module given by IT dept allows this. So most probably this will be amended to include sec.87A also in the finance bill of current year giving retrospective effect.

What is Form 15G/ H and who can use these forms

Tax Deducted at Source (TDS) is nothing but tax paid in advance on behalf of the payee and credit for the same can be claimed by the payee at the time of filing the income tax return. TDS is deductible if interest paid is exceeding Rs.10000 per annum in case of banks and Rs.5000 per annum in case of others. But in income tax rules, there is a privilege given for small investors a)whose final tax amount on his estimated total income is nil and also b) the aggregate of interest income etc. received during the financial year is not exceeding the basic exemption limit for that year. The said privilege is that he can request the payee of the interest amount not to deduct TDS by submitting applicable form no. 15 G/H.

Form no. 15 G is applicable to all except senior citizens who are more than 60 years. In their case, both a and b conditions are applicable. Form 15 H is applicable to senior citizens for claiming the benefit of non-deduction of TDS. For senior citizens, condition a only applicable. There is no limit for interest receipts over basic exemption limit.
Filing a wrong form without being eligible to do so would be illegal and could involve payment of interest on the tax payable and also attracts penal consequences.

Crucial points to remember while submitting Form 15G & 15H:

  1.  We should ensure to mention Permanent Account Number (PAN) on the forms while submitting form No. 15G or 15H. In case, taxpayer fails to provide PAN to the deductor, the tax would be deductible @ 20%. They should check periodically whether they are receiving full interest without TDS after submission of form 15G and 15H.
  2. Forms are to be submitted in duplicate, one of which is forwarded to the IT department and other for payee organization.
  3. The form should be submitted at the beginning of each financial year or at the time of deposit itself so as to avoid a situation where payer has already deducted the tax before its receipt.
  4. If a person is making Fixed Deposits in different branches of same bank then these forms should be deposited at each and every branch where the deposit has been made.
  5. These Forms can only be used for payments like dividends, interest on securities, interest other than interest on securities, national saving schemes etc.
  6. Every financial year, these forms are to be submitted afresh after satisfying the conditions. If any new deposit is made in between the year, again forms are to be given.
  7. No TDS is deductible by banks on interest payable in saving bank accounts and recurring deposit accounts
  8. In case of bank Fixed deposit is made for longer duration, even if interest will be paid on maturity only, the bank is required to deduct tax at source on the interest accrued for that year even though no interest in fact has been paid. So, depositor should ensure to submit form No. 15G/H on yearly basis even if FD doesn’t mature in that year.
  9. Any false or wrong declaration attracts penalty under section 277 & so it should not be signed blindly. Such false declaration is liable for prosecution which may range from 3 months to 7 years depending upon the quantum of default.
  10. Since interest paying organizations are submitting details to income tax dept also in Part A1 in form 26AS, income tax dept knows the quantum of amount of interest escaped TDS against submission of form no.15G/H. So tax payers have to take precaution to include all interest received in their income tax calculation and they can cross check with 26 AS before filing IT return.

Can the Modi Government ease the migration woes in the country?

So the Modi government has taken over and has initiated some bold steps in redefining the governance model of the country. The much needed overhaul has begun. As part of this overhaul has been the relaunch of the PMO India site through which individuals can send their views / grievances to the Prime Minister of India. I decided to test this feature and how active this government was really to hearing the views of its citizens by sending my first feedback to the PMO.

The topic which I addressed is one that I am sure is close to many others like me who form the roving population of India. By roving population, I mean people who move across the country to different locations in search of their dream job. But before they settle down with this dream, is the nightmare of changing the address on all their identity documents be it Passports, Driving Licenses, PAN, Aadhar and Ration Card. People have to run from one department to another to get these done. To make matters worse different states have different laws for some of these documents under state jurisdiction such as Driving Licenses and Ration Cards.

Of course, there are agents who can help, but then you never have any idea whether they are doing legal or illegal means to get your these documents. Later on when something goes wrong, it is you in the firing line and not these agents. Also, with corruption being very high in Indian beauracracy there is no limit to which you need to spend and hope things get done.

In this regard, my appeal to the honorable Prime Minister is the setting up of an Internal Migrant services office in all states where individuals can submit all the relevant documents and then get the changes done when they move to another state with minimum of fuss. Of course, I believe that most of us would not mind paying a transparent fees which these services will charge. All we ask for is transparency and accountability and not freebies. Though this might look as a small issue compared to the bigger issues confronting this government, this is one of the key issues that really hurts the common people most and contributes to the feeling of corruption that swept the country last year. Any step on this front will be a major step in an accountable and corruption free beauracracy.

I am now awaiting the response to see whether this is just another public stunt of a new government or whether they mean serious business. So far immediately after I sent the message to the PMO, I got a auto reply stating that my view will be looked into and is under review. And now the wait begins…

Healthcare Wishlist to Indian Government!!

Since I have been working in the Healthcare industry for the last decade or so, I would like to share my wishlist for the Healthcare industry in India to Mr. Modi’s cabinet. As my wishlist is pretty big, I have focused on the first three items I would like the government to seriously look into.

Healthcare Education
The first and foremost topic on the list is the Healthcare education. It has been known for quite sometime that for budding doctors getting healthcare education in India is one of the most strenuous and torturous experience. Apart from scoring absurdly high numbers in the qualification exams, there is this huge Damocles sword hanging on the family to afford the cost of the healthcare education. Despite opening of many MBBS colleges, neither the process nor the mechanism for students has been transparent and one where children of middle class families feel that they cannot aspire to become doctors. For a nation that is woefully short of doctors with an average of 0.6 physician per 1000 people a ratio which is one of the lowest in the world compared to an average of around 2.5 for developed nations, this is the first area where the new Health Minister has to focus for reforms.

Re-emergence of Ayurveda
The second most important topic on my list of Healthcare reforms in India is the treatment to our own past skills of Ayurveda and Yoga. Over the past few years, Yoga has emerged as one of the best mechanisms for maintaining long term health both physically and mentally. But this has not been due to any efforts from Indian governments, but due to a huge moving population that has shared this knowledge with the rest of the world and the world has seen the benefit of this. Similarly, Ayurveda our own brand of medicine is today struggling for existence. On the one hand is the poor plight of the remaining authentic practitioners, on the other hand is the spiraling cost of clinical studies that are necessary today to make a medicine available for commercial use. It is high time Indian Government steps up with assistance in the field of Ayurveda research and clinical studies. Also to remove the whole new set of phony Ayurveda companies which have come in which provide a bad name for the industry and appropriate department to look after the Ayurvedic products and their development in India is necessary. Like Yoga, Ayurveda is where the future of medicine lies and India can cash in big time if we nurture our own science of medicine properly.

Healthcare Development Hub for the World
The last of the topics that is on my first list for the new government is related to Healthcare development for the world. As Asia becomes more and more a center with the man power, all the healthcare development organizations are turning to Asia and India specifically. Over the last decade or so, Bangalore has become the hub of all healthcare development for world’s leading Healthcare providers be it Siemens, GE, Philips or Toshiba. Given this backdrop, it is high time for the Government to facilitate the next level of growth of this segment by organizing symposiums and conferences that can put Indian healthcare development at the epicenter of the world development. Events such as Connectathon, Radiology Society events and Healthcare Provider conferences could be encouraged and help build awareness both within India as well as the world on the potential that exists. Already some of the leading Healthcare brands are looking at indigenously developed Indian products as the cost effective answers to the spiraling Healthcare cost. A little help from the government could help India truly become the Silicon Valley for Healthcare development.

Of course, as I hinted earlier in my article, this is just my first list. But this will go a long way in setting up the Healthcare reforms for the next decade for India. As Modiji likes one liners, the one liner for his Health Ministry could be: Ek Bharath, Swasth Bharath!!



Soon Minors can open bank account and operate it independently. The Reserve Bank of India on 20.05.2014 issued guidelines allowing minors above 10 years to operate bank accounts independently in order to promote financial inclusion and bring uniformity in opening of such accounts in banks. So we can expect competitive calls from banks for this segment. Earlier the central bank had permitted minors to open fixed and savings deposit bank account with mothers as guardian. Modifying its guidelines, the RBI said all minors can now open a savings, fixed and recurring bank deposit account through either his or her natural guardian or legally appointed guardian. Banks may fix limits in terms of age and amount up to which minors may be allowed to operate the deposit accounts independently. Further Banks are free to decide minimum documents which are required for opening of accounts by minors and also offer additional banking facilities like Internet banking, ATM/debit card and cheque book facility.

Income Tax Slab for A.Y. 2014-15 (F.Y. 2013-14)-individuals

There are three types in individual category:

  1. Below 60 years
  2. 60 years and above but below 80 years
  3. 80 years and above

Income Tax Slab for Individuals who are below than 60 years of age
Taxable Income Tax Rates
Income up to 2 lakh NIL

Income From 2 Lakh to 5 Lakh 10% on income over Rs. 2 Lakh; Less: Tax Credit – 10% of taxable income up to Rs.2000/- maximum

Income from 5 Lakh to 10 Lakh Rs. 30,000/- plus 20% on above income 5 lakh
Income above 10 lakh Rs. 1 lakh 30 thousand plus 30% on income above 10 lakh

Surcharge will be applicable @ 10% when total taxable income is over 1 crore.
3% education cess will be applicable on income tax & surcharge

Income Tax Slab for Individuals who are 60 years or over but below 80 years of age
Income Tax Rates
Income up to 2 .5 lakh NIL
Income From 2.5 Lakh to 5 Lakh 10% on income over Rs. 2.5 Lakh
Income from 5 Lakh to 10 Lakh Rs. 25,000/- plus 20% on above income 5 lakh
Income above 10 lakh Rs. 1 lakh 25 thousand plus 30% on income above 10 lakh

Surcharge will be applicable @ 10% when total taxable income is over 1 crore.
3% education cess will be applicable on income tax & surcharge
Income Tax Slab for Individuals who are over 80 years of age
Income Tax Rates
Income up to 5 Lakh NIL
Income From 5 Lakh to 10 Lakh 20% on income over Rs.5 Lakh
Income above 10 lakh Rs. 1 lakh plus 30% on income above 10 lakh

Surcharge will be applicable @ 10% when total taxable income is over 1 crore.
3% education cess will be applicable on income tax & surcharge

TDS Rates Chart for F.Y. 2014-15 A.Y. 2015-16

TDS Rates Chart for F.Y. 2014-15 A.Y. 2015-16
Section Payment Nature Payment in excess of TDS Rate-indivi TDS Rate for Others

194A Interest from a Banking Company 10000 10% 10%
194A Interest other than from a Banking Co. 5000 10% 10%
194C Contractors (including Sub-Contractor) 30000 (per payment)
or Rs.75000 per annum 1% 2%

194D Insurance Commission 20000 10% 10%
194H Commission or Brokerage 5000 10% 10%
194I Rend of Land & Building 180000 10% 10%
194I Rent of Plant & Machinery and Other Equipments 180000 2% 2%
194IA Transfer of Immovable Property
other than Agriculture Land 5000000 1% 1%
194J Payment for Professional Services,
Technical Services & Royalty 30000 10% 10%


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