The Central Board of Direct Taxes (CBDT) has recently revised the norms related to Form 15 H, which is applicable to persons aged above 60 years. The new rule will consider the provision of Section 87A, according to CBDT notification. Notably, Form 15H is for senior citizens who are 60 years or older. This is submitted to prevent TDS deduction on your income, and some banks allow you to submit this form online through the bank’s website. Form 15H is valid for one financial year, therefore it is submitted every year at the beginning of the financial year to ensure that the bank does not deduct any TDS on your interest income.

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According to the CBDT, the declaration in Form 15H can be accepted from an individual whose income is higher than the basic exemption limit (Rs 3 lakh), but is eligible for Section 87A rebate where tax liability will be nil after taking Section 87A in account. 

The CBDT notification says, "In the Income-tax Rules, 1962, in Appendix II, in Form No. 15H in Part II, in note 10, the following provisions shall be inserted, namely- Provided that such person shall accept the declaration in a case where income of the assessee, who is eligible for rebate of income-tax under section 87A, is higher than the income for which declaration can be accepted as per this note, but his tax liability shall be nil after taking into account the rebate available to him under the said section 87A.”  

For the financial year 2019-20, a senior citizen's tax exemption limit is Rs 3 lakh compared to Rs 2.5 lakh for non-senior citizens. The modification in Form 15H will benefit those senior citizens whose tax liability will be nil after allowing rebate under Section 87A. This will benefit those senior citizens whose interest income is the only source of income. 

Accordingly, if they are able to limit their taxable income below Rs 5 lakh, they need not pay any income tax and will be eligible to file Form 15H. 

According to Section 87A, “An assessee, being an individual resident in India, whose total income does not exceed Rs 5 lakh, shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax or an amount of Rs 12,500, whichever is less.”

Under Section 87A, assessees who are resident individuals with a total income below Rs 5 lakh can avail benefit, and the maximum rebate allowed will be Rs 12,500.