Government told the Rajya Sabha on Tuesday that submission of the relevant forms would exempt the public from incurring tax deducted at source on interest earned on deposits.
Replying to supplementaries during Queston Hour at the Rajya Sabha, Finance Minister P Chidambaram said if any one has been subject to TDS from the interest income, it would be corrected during the next quarter.
It was wrong to deduct TDS after submission of either Form 15G or Form 15H as the case may be, he said.
In reply to a query, Chidambaram said a proposal to do away with taxes on assistance announced by the Centre for victims of Mumbai blasts was under government's consideration.
To a query, the finance minister said the tax exemptions on income for senior citizens at Rs 1,85,000 was high.
The senior citizens were also being given a 9 per cent on the Senior Citizens Savings Scheme introduced in 2004, he said.
It applies to people aged 60 or more as well as to those who are 55 or more but are less than 60 and retired on superannuation or otherwise.
However, it was made clear that the interest of 9 per cent per annum would be taxable and TDS would not be deducted if Form 15H or Form 15G as the case may be.
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