I am a senior citizen deriving taxable income only from interest with dividend income being exempt. Such interest income is about Rs. 2.50 lakh.
Being entitled to basic deduction of Rs.2.40 lakh, my taxable income is about Rs. 10,000 with tax at Rs. 1,000. But tax, that is being deducted, is at Rs. 25,000.
The declaration expected in Form 15H is that “the tax on my estimated income will be nil”.
I believe that it should be possible for me not to file Form 15H for interest from one bank where my income is about Rs. 25,000, while filing the Form for others, so that tax deduction will be Rs. 2,500 more than my tax liability. I do not understand why this should not be permissible especially since tax deducted from a senior citizen's salary of like amount will be only Rs. 1,000, while those in business or profession with the same income are not liable for tax deduction at source nor even advance tax, as the tax falls below the limit for payment of advance tax.
Can this discrimination be challenged in the court?
Tax law targets different classes of income with different tax consequences because of different treatment necessary for each class. There can, therefore, be no inference of discrimination to warrant challenge in a court of law.
The solution for the reader is to approach the assessing officer under Sec. 197 for a certificate of deduction at a lower rate so as to match deduction with the liability on an application to be made to the assessing officer in Form 13.
It is hoped that the present system of responding to applications under Sec. 197 would be improved so that the remedy for such contingencies is effective.
The solution suggested by the reader of filing Form 15H for partial income so as to match the tax deduction at source with liability is not permitted by law, though there is no reason why it should not be permitted. If such a course is adopted by any person, he will be exposing himself to an offence of having made a false declaration under verification punishable under Sec. 272 of the Act with imprisonment and fine, unless he is able to prove reasonable cause as provided under Sec. 278AA. His explanation for filing false forms was to match tax deduction with his tax liability will not be an acceptable reason, since it is the privilege of only the government to “calibrate” tax levy with revenue consideration.
