What changed
RBI observed that RRBs were deducting TDS even after customers submitted Form 15-G/15-H, often due to misplaced forms or poor tracking. To fix this, RBI now requires RRBs to provide a formal acknowledgment at the time of form submission.
What it means for you
This directive creates a clear audit trail for tax exemption claims, reducing customer complaints and legal risks for RRBs. Banks must update their branch procedures to ensure acknowledgments are issued systematically, or face regulatory scrutiny.
What you must do
- Implement a standard acknowledgment process for Form 15-G/15-H at all branches.
- Train branch staff on the new acknowledgment requirement and proper form tracking.
- Audit current TDS deduction practices to ensure compliance with this circular.
- Set up a centralized or branch-level log to monitor form submissions and acknowledgments.
Who it affects
Regional Rural Banks (RRBs), RRB branch managers and staff, Depositors submitting Form 15-G/15-H
Why did RBI issue this circular?
RBI received complaints that RRBs were deducting TDS even after customers submitted Form 15-G/15-H, often due to misplaced forms or poor record-keeping.
What must RRBs do now?
RRBs must give a written acknowledgment to customers when they submit Form 15-G/15-H, ensuring accountability and preventing wrongful TDS deductions.
Does this apply to all banks?
No, this circular specifically applies to Regional Rural Banks (RRBs), as per the document reference RPCD.CO.RRB.BC.No. 78/03.05.33/2012-13.