Deduction of tax at source from interest on cumulative deposits/debentures/bonds--Clarification regarding

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..... ndividual or a Hindu undivided family, who is responsible for paying to a resident, any income by way of interest, other than interest on securities, to deduct income-tax at the prescribed rate thereon, 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. 2. Similarly .....

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..... t source, of sections 193 and 194A, as the case may be, are attracted. 4. Instances have come to the notice of the Board, wherein tax has been deducted at source at the time of payment on maturity of the cumulative deposits/debentures/bonds and not at the time of credit of the interest income at periodical intervals. This causes unnecessary hardship to the recipients. As per the provisions of th .....

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..... e tax deductors are delaying payment of tax, which attracts penal provisions contained in the Income-tax Act. The tax deductors are advised to follow the correct position of law, as outlined above. 7. It may, however, be stated that tax is not required to be deducted from interest incomes which are otherwise exempted from tax deduction under sections 193 and 194A. These exemptions include intere .....

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