15G-15H Forms of Income Tax are Pure Non-Sense

                                 
The world is fighting climate change by progressively reducing green house gases. Reduction of use of paper is being contemplated to reduce deforestation and carbon footprint. Railways have started accepting digital tickets instead of paper tickets. Income Tax department too has drastically reduced use of paper submission of Income Tax returns and allied supporting paper submission. There are other working areas of various government departments which have gone digital, considerably reducing use of white papers. 

However there is a highly grey area (we may even call it a black area!) of the Income Tax Department which makes it mandatory to use white papers. This causes use of billions of white papers without any or negligible commensurate benefit.

I am talking about submission of 15G and 15H for accruable bank/post office or other form of interest or dividends. The statistics available for Financial year 2011-2012 (or A Y 2012-2013) is that 2.87 crore returns were filed of which taxable returns were a mere 1.25 crores or just about 1% of total population. However, there are a large section of passive investors in villages and towns across India who invest in Bank fixed or recurring deposits. These people do not file Income tax returns as they do not have taxable incomes. Such people can be safely estimated to be 10 crore (remember there are more than 10 crore Jan Dhan accounts).

Well almost all of these people have bank deposits of say around 1.5 lakh or more. Obviously all of them have to file form 15G or 15H in banks or post offices (senior citizen saving scheme requires submission of 15H) to avoid TDS, as TDS is deducted if interests (except SB A/C interest) exceeds Rs.10000/-only. Now each submission requires two copies for submission and one copy as receipt, plus one copy of PAN. Therefore a total of a minimum of 4 sheets of A4 or Legal size white paper is required for each 15G or 15H submission. Therefore for 10 crore submissions, a total of 40 crores or 400 million sheet of paper is used. At the rate of 5 gms per sheet (70-75 GSM paper), the total use of paper stand at a whopping 2000000 Metric Tons or 2 million tons of white paper. The total money wasted by common man is a of the order of Rs.100 crore (Rs. 1 billion) including copying charges, paper price, conveyances etc. apart from the time loss. All this time and cost run add up to NIL revenue generation!!

How to avoid the use of this paper trail:

1. Raise the interest cut off for TDS at a minimum of Rs.100000/- instead of Rs.10000/- as at present, because the threshold of non taxable income is 250000/-.

2. Stop submission of PAN copy, the PAN numbers are already with the bank. This alone would reduce the paper trail by one fourth or 500 thousand tons!

3. Allow digital uploading of 15G-15H declaration by account holders in the website of the bank.

Major reduction of this paper trail would benefit the bank, by freeing bank employees for other works and the citizens too will be spared of the worries of standing in long queue and this aspect is very important for senior citizens.

In this digitized era, paper submission of 15G-15H is equivalent to a medieval approach and should be immediately discontinued.