Hirenbhai Parekh, a senior citizen, is earning interest of Rs 2,40,000 on his bank deposits.

However, since he is not liable to pay any Income-Tax on his total income after eligible deductions, he currently enjoys the relief of exemption from TDS by submitting the prescribed Form 15H to the respective banks making interest payments.

But this luxury of TDS exemption may not live long. The new Direct Tax Code to be effective from April 1, 2011 does not provide for any similar relief and hence Hirenbhai’s interest receipts of Rs 2,40,000 will have to bear the harsh 10% TDS brunt of Rs 24,000.

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