Special-tax on the gross amount of interest received by or accruing to the Scheduled Banks on loans and advances made in India - Income Tax - 877/CBDT

INSTRUCTION NO. 877/CBDT Dated : September 18, 1975 The Interest Tax Act, 1974 imposes a Special-tax on the gross amount of interest received by or accruing to the Scheduled Banks on loans and advances made in India. Necessary instruction regarding the opening of Heads of Account were issued under Board's Instruction No. 872 dated the 4th September 1975. 2. As in the case of other revenue items, the estimates of collection for the Interest Tax have also to be prepared and sent to the Department of Economic Affairs for incorporation in the budget estimates. For this purpose, data regarding the actual collection of the preceding year, collection during the relevant part of the couttent year, revised estimates for the current year and the forecast for the next year are required. Besides, information regarding Interest Tax payable by way of advance-tax, self assessment and as a result of regular assessment and other data to assess the potential of Interest tax collection for the current year are required in the Board's office. Two proformae in which such estimates and other information are required to be furnished are enclosed. In the statement showing the budget estimates ordinary collection of Interest Tax should include not only the tax on regular assessment but also the Interest Tax collected on the basis of self-assessment. Besides, collection and other information u/s 2(17)(iv) of the Income-tax Act should be shown in both the prioformae printed below under the columns intended for showings the collection and other information in respect of banks which are companies. Although Interest Tax Act does not prescribe the status of the assessee but because the accounting of the collection under Interest Tax Act has to be made separately for banks which are companies and those which are not companies, the status as adopted for assessments under the Income-tax Act may be followed. 3. The required information may please be furnished by the following dates:- (a) 6-monthly estimates of Interest-tax-20th October of every year. (b) 9-monthly estimates of Interest-tax-20th January of every year. 4. You are also requested to state on a separate sheet the names of the banks and their status i.e. company or non-company liable to Interest Tax in your charge along with the six monthly estimates due by 20th October, 1975. Subsequently, the names with status should be stated only if the banks added/deleted for the purpose of tax under the Interest Tax Act. 5. Kindly acknowledge the receipt.