Banks, PO not to make tax deduction at source

Kolkata, Nov 27: In a major administrative decision,the Union Finance Ministry has issued separate directives to the Reserve Bank of India(RBI)and the Department of Posts not to deduct any tax under TDS after accepting form 15H and 15G from their customers.

Official sources quoting the union ministry's direction here today informed that the banks and post offices had been asked not to make any deduction of tax at source when the depositor had either filed Form 15H and 15G or had offered to file them through a certificate under section 197(1),as the case may be.

Incidentally,the ministry's direction came in the wake of a number of complaints relating to the non-acceptance of these forms by the banks and post offices and their decision to deduct taxes despite the depositor filing or offering to file these forms,the sources added.

UNI