Section 30 - Amendment of Chapter XVII - Finance (No. 2) Act, 1967

30. Amendment of Chapter XVII In Chapter XVII of the Income-tax Act, under the sub-heading B. - Deduction at source , - (1) in section 193, the Explanation shall be omitted; (2) after section 194, the following section shall be inserted, namely :- 194A. Interest other than interest on securities. - (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income chargeable under the head Interest on Securities , 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 issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force : Provided that no such deduction shall be made in a case where the person (not being a company or a registered firm) entitled to receive such income furnishes to the person responsible for making the payment - (a) an affidavit, or (b) a statement in writing, declaring that his estimated total income assessable for the assessment year next following the financial year in which the income is credited or paid will be less than the minimum liable to income-tax. (2) The statement in writing referred to in sub-section (1) shall also contain such other particulars as may be prescribed, be verified in the prescribed manner, be signed in the presence of a Gazetted Officer of the Central or a State Government and bear an attestation by such Officer to the effect that the person who has signed the statement is known to him. (3) The provisions of sub-section (1) shall not apply - (i) where the income credited or paid at any one time does not exceed four hundred rupees; (ii) to such income credited or paid before the 1st day of October, 1967; (iii) to such income credited or paid to - (a) any banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies, or any co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank), or (b) any financial corporation established by or under a Central, State or Provincial Act, or (c) the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), or (d) the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), or (e) any company or co-operative society carrying on the business of insurance, or (f) such other institution, association or body which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette. Explanation : In this section, Gazetted Officer includes a Tehsildar or a Mamlatdar of a Taluka or Tehsil or any other officer performing functions similar to those of a Tehsildar or Mamlatdar.; (3) for section 196, the following section shall be substituted, namely :- 196. Interest or dividend or other sums payable to Government, Reserve Bank or certain corporations. -Notwithstanding anything contained in the foregoing provisions of this Chapter, no deduction of tax shall be made by any person from any sums payable to - (i) the Government, or (ii) the Reserve Bank of India, or (iii) a corporation established by or under a Central Act which is, under any law for the time being in force, exempt from income-tax on its income, where such sum is payable to it by way of interest or dividend in respect of any securities or shares owned by it or in which it has full beneficial interest, or any other income accruing or arising to it. ; (4) in section 197, in sub-section (1), for clause (a), the following clause shall be substituted, namely :- (a) income-tax is required to be deducted at the time of credit or, as the case may be, at the time of payment at the rates in force under the provisions of sections 192, 193, 194A and 195; ; (5) in sections 198, 199, 200, 202 and 205, for the words and figures sections 192 to 195 , the words, figures and letter sections 192 to 194, section 194A and section 195 shall be substituted; (6) for section 203, the following section shall be substituted, namely :- 203. Certificate for tax deducted. - Every person deducting tax in accordance with the provisions of sections 192 to 194, section 194A and section 195 shall, at the time of credit or payment of the sum, or, as the case may be, at the time of issue of a cheque or warrant for payment of any dividend to a shareholder, furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed. ; (7) in section 204, - (i) for the words and figures sections 192 to 203 and section 285 , the words, figures and letter sections 192 to 194, section 194A, sections 195 to 203 and section 285 shall be substituted; (ii) in clause (iii), for the words in the case of payment , the words in the case of credit, or, as the case may be, payment shall be substituted; (8) after section 206, the following section shall be inserted, namely :- 206A. Person paying interest to residents without deduction of tax, to furnish prescribed return. - Any person responsible for paying any income referred to in section 194A shall prepare, and within thirty days from the 31st day of March in each year, deliver or cause to be delivered to the Income-tax Officer in the prescribed form and verified in the prescribed manner a return in writing showing - (a) the name and address of every person who has furnished to him an affidavit or a statement under the proviso to sub-section (1) of section 194A; (b) the amount of the income credited or paid during the financial year to each such person and the time or times at which the same was credited or paid, as the case may be; and (c) such other particulars as may be prescribed. .