I am a retired high school teacher and my only income is from bank deposit interest. This year, our income from bank interest exceeded basic exemption limit (for computing tax liability), by about Rs 60,000, and the bank rejected Form 15-G filed prior and charged 10% of the entire interest income, which is about Rs 60,000 in taxes and not 10% of the amount exceeding Rs 5 lacs (2×2.5 lacs)We have no other income except income from bank interest. 1. How can we seek tax refund of Rs 60,000? 2. Might Rs 1.2 lacs donation during this year to charitable institution help claim above deduction under Sec. 80G?
Submitting Form 15 and avoiding TDS is not the way to escape from tax liability. Hence, no need to worry about the TDS. You can seek refund by filing IT return for that relevant year. If your tax liability is less than that of TDS already done, then definitely IT Department will refund such additional TDS amount. There are many ways to do tax planning. Even investing in tax efficient products is also a way. However, it is hard for me to suggest any one or two products. Because I am not aware of your goals and current financial status.