My mother is a senior citizen. She has some fixed deposits with a bank and had earned interest of ₹3.30 lakh, which crossed the income tax exemption limit of ₹3 lakh. So she deposited Rs.45,000 in the Senior Citizen Saving Scheme (SCSS) to avail of benefits under Section 80C. She had furnished a 15G form to the bank for no tax deduction at source. But the bank has deducted tax @ 20% on interest as she does not have PAN. The bank has advised us to file her ITR to claim the refund. Can the bank not accept 80C proof and not deduct tax? What should we do to get the amount back? She does not have a PAN card. Can she file the return without a PAN card?
Answer: As per Section 206AA, since your mother does not have a PAN number, the bank must deduct tax @ 20% on the interest even if your mother has submitted form No 15G. Since your mother is a senior citizen, she must submit form No. 15H, not 15G.
A senior citizen can submit form No. 15 H if the total tax on her income is nil. So, if there is no tax liability after considering the deduction under Section 80 C, your mother can submit form no. 15H. The bank cannot accept the proof under Section 80 C while deducting the TDS.
To claim the tax refund already deducted by the bank, it is necessary to file her income tax return (ITR). Please note that your mother can not file her ITR because she does not have a PAN. Since your mother has no PAN, you must first apply for one. However, if she has an Aadhaar Number, it can be used instead of PAN. Please submit the same to the bank requesting to revise the submitted TDS return to mention PAN/Aadhaar number against her name. Unless the bank carries out this correction, your mother will not get credit for the tax deducted by the bank. Moreover, even if your mother submits from No. 15H, the bank will again deduct tax @ 20% on the interest unless she furnishes her PAN/Aadhaar.
You don’t need to file your income tax return because you have a PAN.
Balwant Jain is a tax and investment expert and can be reached at jainbalwant@gmail.com and on @jainbalwant on Twitter.
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Published: 01 May 2024, 02:45 PM IST