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TMI BlogSection 193 of the Income-tax Act, 1961--Deduction of income-tax at source from interest on securities during the financial year 1992-93--Instructions regardingX X X X Extracts X X X X X X X X Extracts X X X X ..... 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, being debentures listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956, and, any rules made thereunder, 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 individual does not exceed Rs. 2,500. (c) tax will not be deducted at source under section 193 in the case of a resident individual who makes a declaration in Form No. 15F (vide Annexure II to the enclosed draft circular) to the effect that tax on his estimated total income of the financial year 1992-93 will be nil; (d) no tax will be deducted at source or it will be deducted at a lower rate in the case of a person (including a company) where a certificate under section 197 is issued by the Assess ..... 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 centincome 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, 1992 ( vide 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 a State Government where the security is held by a resident individual, and the holder makes a declaration in writing in duplicate in the prescribed manner as provided in section 197A of the Income- tax Act, 1961. 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 by you, to the Chief Commissioner/Commissioner of Income-tax concerned, as provided in rule 29C(5) 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 on its income. Payment made to Life Insurance Corporation and Unit Trust of India are exempt from the requirement of TDS by their respective Acts; (vii) under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit is given or to whom payment is made by any mode, as the case may be. Form No. 16A can be issued by the tax deductors on their own stationery. Detailed instructions regarding the use of these forms have been issued in Board's Circular No. 597 (F. No.275/42/91-IT(B) dated 27th March, 1991 (See [1991] 189 ITR (St.) 32). If a person fails to furnish a certificate as required under section 203, he shall be liable to pay by way of penalty under section 272A, a sum which shall not be less than Rs.100 but which may extend to Rs.200 for every day during which the failure continues. (c) According to the provisions of section 203A, it is obligatory for all person responsible for deducting tax at source to obtain and quote the tax deduction account number (TAN) in the challans, TDS certificates, returns, etc. Detailed instructions in this regard are available in the Board's Circular No.497 (F.No.275/118/87-IT(B)) dated 9-10-1987 (See [1988] 169 ITR (St.) 54). If a person fails to comply with provisions of section 203A, he shall be liable to pay by way of penalty under section 272BB a sum up to Rs.5,000. (d) According to the provisions of section 206, read with rules 36(A) and 37 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... — ( i ) in the case of every individual, Hindu undivided family or association of persons or body of individuals referred to in sections 88 and 88B having a total income exceeding one hundred thousand rupees, be reduced by the amount of rebate of income-tax calculated under those sections, and the income-tax as so reduced, ( ii ) in the case of every person, other than those mentioned in item ( i ), having a total income exceeding one hundred thousand rupees, be increased by a surcharge for purposes of the Union calculated at the rate of twelve per cent of such income-tax: Provided that no such surcharge shall be payable by a non-resident. Annexure II FORM NO. 15F [ See Rule 29C(1)] Declaration under section 197A(1) of the Income-tax Act, 1961 to be made by an individual claiming receipt of "interest on securities" without deduction of tax I.........................................................................................................son/daughter/wife of.........................................................................resident of @................................................................do hereby declare :— 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaration 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; ( ii ) in any other case, with rigorous imprisonment which shall not be less than three months but which may extend to three years and with fine. [FOR USE BY THE PERSON TO WHOM THE DECLARATION IS FURNISHED] 1. Name and address of the person responsible for paying the interest on securities mentioned in Paragraph 1 of the declaration 2. Date on which the declaration was furnished by the Declarant 3. Period for which interest is paid 4. Amount of interest 5. Date on which interest is paid Forwarded to the Chief Commissioner or Commissioner of Income-tax............................ ................................. Signature of the person Place........ responsible for paying Date......... interest on securities. ANNEXURE III FOR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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