Times of India reports some cooperative banks in Gujarat have paid interest to their account holders without deducting TDS. The income tax authorities dealing with TDS recently raided at least four of these cooperative banks and found evidence of non-compliance in the payment of interest on fixed deposits.
Sources say the banks have been asked to furnish the details and data of the past six years to assess the TDS non-compliance. As per the provision, the banks have to ask for the declaration in Form15G/Form15H (prescribed under the Indian income tax law).
Sources say the purpose of this declaration is to inform the bank that the individual’s annual income tax liability is nil and on that basis request the bank not to deduct tax at source from the interest.
