Section 195 - Other sums - Income-tax Act, 1961

Other sums. 195. 1 [(1) Any person responsible for paying to a non-resident, not being a company, or to a foreign company, 17 [ any interest (not being interest referred to in section 194LB or section 194LC) ] 20 [or section 194LD] 2 [***] or any other sum chargeable under the provisions of this Act (not being income chargeable under the head Salaries 3 [***]) shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force : 4 [Provided that in the case of interest payable by the Government or a public sector bank within the meaning of clause ( 23D ) of section 10 or a public financial institution within the meaning of that clause, deduction of tax shall be made only at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode :] 24 [****] 18 [Explanation . 1 -For the purposes of this section, where any interest or other sum as aforesaid is credited to any account, whether called Interest payable account or Suspense account or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly. Explanation 2 . -For the removal of doubts, it is hereby clarified that the obligation to comply with sub-section (1) and to make deduction thereunder applies and shall be deemed to have always applied and extends and shall be deemed to have always extended to all persons, resident or non-resident, whether or not the non-resident person has- ( i ) a residence or place of business or business connection in India; or ( ii ) any other presence in any manner whatsoever in India. ]] (2) Where the person responsible for paying any such sum chargeable under this Act (other than 6 [***] 7 [***] 8 [***] 9 [***] salary) to a non-resident considers that the whole of such sum would not be income chargeable in the case of the recipient, he may make an application 22 [ in such form and manner to the Assessing Officer, to determine in such manner, as may be prescribed ] , the appropriate proportion of such sum so chargeable, and upon such determination, tax shall be deducted under sub-section (1) only on that proportion of the sum which is so chargeable. 12 [***] 13 [(3) Subject to rules made under sub-section (5), any person entitled to receive any interest or other sum on which income-tax has to be deducted under sub-section (1) may make an application in the prescribed form to the 14 [Assessing] Officer for the grant of a certificate authorising him to receive such interest or other sum without deduction of tax under that sub-section, and where any such certificate is granted, every person responsible for paying such interest or other sum to the person to whom such certificate is granted shall, so long as the certificate is in force, make payment of such interest or other sum without deducting tax thereon under sub-section (1). (4) A certificate granted under sub-section (3) shall remain in force till the expiry of the period specified therein or, if it is cancelled by the 15 [Assessing] Officers before the expiry of such period, till such cancellation. (5) The Board may, having regard to the convenience of assessees and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an application may be made for the grant of a certificate under sub-section (3) and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith.] 21 [(6) The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to payment of such sum, in such form and manner, as may be prescribed.] 19 [ (7) Notwithstanding anything contained in sub-section (1) and sub-section (2), the Board may, by notification in the Official Gazette, specify a class of persons or cases, where the person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall make an application 23 [ in such form and manner to the Assessing Officer, to determine in such manner, as may be prescribed ] , the appropriate proportion of sum chargeable, and upon such determination, tax shall be deducted under sub-section (1) on that proportion of the sum which is so chargeable. ------------------------- Notes :- 1. Substituted by the Finance Act, 1987, w.e.f. 1-6-1987. Prior to substitution, sub-section (1) was amended by the Finance Act, 1965, w.e.f. 1-4-1965 and the Finance Act, 1975, w.e.f. 1-4-1975. 2. Words (not being interest on securities) omitted by the Finance Act, 2003, w.e.f. 1-6-2003. 3. Words or dividends omitted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. 4. Inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.r.e.f. 1-6-1987. 5. Inserted by the Finance Act, 2003, w.e.f. 1-4-2003. Earlier the second proviso was inserted by the Finance Act, 1997, w.e.f. 1-6-1997 and later on omitted by the Finance Act, 2002, w.e.f. 1-6-2002. 6. interest including omitted by the Finance Act, 1976, w.e.f. 1-6-1976. 7. Words interest on securities omitted by the Finance Act, 2003, w.e.f. 1-6-2003. 8. Word , dividend omitted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. 9. Word and omitted by the Finance Act, 2003, w.e.f. 1-6-2003. 10. Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 11. Substituted for in the prescribed manner by the Finance Act, 1988, w.r.e.f. 1-3-1988. The expression in the prescribed manner was earlier substituted for by general or special order by the Finance Act, 1987, w.e.f. 1-6-1987. 12. Omitted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. Prior to omission, proviso was inserted by the Finance Act, 1987, w.e.f. 1-6-1987 13. Inserted by the Finance Act, 1970, w.e.f. 1-4-1970. 14. Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 15. Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 16. Inserted by the Finance Act, 2008, w.e.f. 1-4-2008. 17. Substituted vide Finance Act, 2012, w.e.f. 01-04-2012, before it was read as:- any interest 18. Explanation shall be numbered as Explanation 1 thereof, and after Explanation 1 as so numbered, the following Explanation has been inserted vide Finance Act, 2012, w.e.f. 01-04-1962 19. Inserted vide Finance Act, 2012, w.e.f. 01-07-2012. 20. Inserted vide Finance Act, 2013, w.e.f. 1st day of June, 2013. 21. Substituted vide THE FINANCE ACT, 2015 w.e.f. 1st day of June, 2015, before it was read as, 16 [ (6) The person referred to in sub-section (1) shall furnish the information relating to payment of any sum in such form and manner as may be prescribed by the Board ] 22. Substituted vide FINANCE (NO. 2) ACT, 2019 w.e.f. 01-11-2019 before it was read as to the 10 [Assessing] Officer to determine, 11 [by general or special order] 23. Substituted vide FINANCE (NO. 2) ACT, 2019 w.e.f. 01-11-2019 before it was read as to the Assessing Officer to determine, by general or special order 24.Omitted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 before it was read as 5 [Provided further that no such deduction shall be made in respect of any dividends referred to in section 115-O.]