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TMI BlogDeduction of tax at source--Section 193 read with section 197(1)/(2) of the Income-tax Act, 1961--Interest on Government securities--Rates of tax applicable during the year 1990-91X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the payee or at the time of payment thereof, whichever is earlier. For this purpose, credit to any suspense account or any other account, by whatever name called, shall be deemed to be a credit of such income to the account of the payee; (b) tax will not be deducted at source from any interest payable to a resident individual on debentures issued by a company in which the public are substantially interested, if the interest is paid by the company by an account payee cheque and the amount of such interest, or, as the case may be, the aggregate amount of such interest paid or likely to be paid during the financial year by the company to such an individual does not exceed Rs.2,500. 3. In this connection, attention is invited to the provisions of sections 200, 203, 203A and 206 of the Income- tax Act, the sum and substance of which is as under:-- (a) According to the provisions of section 203 of the Income-tax Act, every person responsible for deducting tax at source is required to furnish a certificate to the effect that tax has been deducted and to specify therein, inter alia, the amount deducted and other particulars that may be prescribed. The certificate has to be furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from "interest on securities" in Form No.25 prescribed under rule 37 of the Income-tax Rules. It may be noted that the third copy of the TDS certificate issued to the assessee should be enclosed with the annual return. If a person fails to furnish in due time the annual return, he shall, on an order passed by the income-tax authority, under section 272A, pay, by way of penalty, a sum which shall not be less than Rs.100, but which may extend to Rs.200 per day for which the failure continues. (d) According to the provisions of section 200 of the Income-tax Act, any person deducting any sum in accordance with the provisions of section 193 shall pay, within the prescribed time, the sum so deducted to the account credit of the Central Government. If he fails to deduct tax at source, or, after deducting, fails to pay tax to the credit of the Government, he shall be liable to action in accordance with the provisions of sections 201 and 221. Further, penalty under section 271C shall also be leviable for failure to deduct tax at source which will be equal to the amount of tax not deducted. In this connection, attention is also invited to the provisions of section 276B of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. On investment income and long- term capital gains 20 per cent B . On income by way of interest payable on a tax-free security 15 per cent C . On the whole of the other Income-tax at 30 per cent of the amount of the income or Income-tax in respect of the income at the rates prescribed in Sub-paragraph I of Paragraph A of Part III of the First Schedule to the Finance Act, 1990 (Copy at Annexure I), if such income had been the total income, whichever is higher. 2. In the case of any other person,— A . On the income by way of interest on a tax-free security 15 per cent B . On the whole of other income (excluding interest payable on a tax-free security) [As against 1( c ) above] II. In the case of a company ;— ( i ) Where the company is a domestic company - on income by way of interest on securities (excluding interest payable on a tax-free security) 21.5 per cent ( ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction at source under the proviso to section 193 or of the interest payable on such debentures/securities/bonds as have been specified by the Central Government by notification in the Official Gazette under the proviso to section 193; (v) no tax should be deducted from any interest payable on any other security of the Central or State Government where the security is held by a resident individual, and the holder makes a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner as provided in section 197A(1) of the Income-tax Act. A copy of declaration form prescribed under the provisions of section 197A of the Income-tax Act is at annexure II. A copy of such declaration should be forwarded by you on or before the seventh day of the month next following the month in which the declaration is furnished to you to the Chief Commissioner/Commissioner of Income-tax concerned, as provided in rule 29C of the Income-tax Rules, 1962; (vi) no tax should be deducted from any sum payable in respect of any security owned by a corporation established by or under a Central Act which, under any law for the time being in force, is exempt from income-tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 987 (See [1988] 169 ITR (St.) 54. If a person fails to comply with the provisions of section 203A, he shall, on an order passed by the Assessing Officer under section 272BB, pay, by way of penalty, a sum which may extend to Rs.5,000. (c) According to the provisions of section 206 of the Income-tax Act, read with rules 36A and 37 of the Income-tax Rules, the prescribed person in the case of every office or Government, the principal officer in the case of every company, the prescribed person in the case of every local authority or other public body or association, every private employer and every other person responsible for deducting tax under the provisions of Chapter XVII of the Income-tax Act shall prepare, within the prescribed time after the end of each financial year, and deliver or cause to be delivered by the 31st May since amended as 30th June, vide Notification No. S.O. 466(E), dated 8th June, 1990 (See [1990] 184 ITR (St.) 134), following the financial year to the designated Income-tax Officer, the annual return of deduction of tax under section 193 from "Interest on securities" in Form No.25 prescribed under rule 37 of the Income-tax Rules. It may be noted that the thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 2 of the Income-tax Act, not being a case to which Sub-paragraph II of this Paragraph or any other paragraph of this part applies— Rates of income-tax ( 1 ) Where the total income does not exceed Rs. 22,000 Nil; ( 2 ) Where the total income exceeds Rs. 22,000 but does not exceed Rs. 30,000 20 per cent of the amount by which the total income exceeds Rs. 22,000; ( 3 ) Where the total income exceeds Rs. 30,000 but does not exceed Rs. 50,000 Rs. 1,600 plus 30 per cent of the amount by which the total income exceeds Rs. 30,000; ( 4 ) Where the total income exceeds Rs. 50,000 but does not exceed Rs. 1,00,000 Rs. 7,600 plus 40 per cent of the amount by which the total income exceeds Rs. 50,000; ( 5 ) Where the total income exceeds Rs. 1,00,000 Rs. 27,600 plus 50 per cent of the amount by which the total income exceeds Rs. 1,00,000. Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall— ( i ) in the case of every individual, Hindu undivided family or association of persons or body ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. Signature of the declarant Verification I...................................................... do hereby declare that, to the best of my knowledge and belief, what is stated above is correct, complete and is truly stated. Verified today, the......................................day of........................19....... ............................... Place......................... Signature of Declarant Notes : 1. †Give complete postal address. 2. The declaration should be furnished in duplicate. 3. *Delete whichever is not applicable. 4. Before signing the verification, the declarant should satisfy himself that the information furnished in the declaration is true, correct and complete in all respects. Any person making a false statement in the declaration shall be liable to prosecution under section 277 of the Income-tax Act, 1961, and, on conviction be punishable— (i) in a case where tax sought to be evaded exceeds one lakh rupees, with rigorous imprisonment which shall not be less than six months but which may extend to seven years and with fine; ..... X X X X Extracts X X X X X X X X Extracts X X X X
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