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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 1994-95--Instructions regardingX X X X Extracts X X X X X X X X Extracts X X X X ..... deemed to be a credit of such income to the account of the payee. 3. For the financial year 1994-95, the applicable rates in so far as they relate to deduction of tax at source from the payment of interest on securities are given in Part II of the First Schedule to the Finance Act, 1994. Briefly stated, these are as follows : (A) In the case of a person other than a company— (1) Where the person is resident in India, on income by way of interest payable on — (a) any security of the Central or a State Government : 10% (b) any debentures or other securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act : 10% (c) any debentures issued by a company where such debentures are listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 and any rules made thereunder : 10% (2) Where the person is not resident in India income-tax @ 30% of the amount of income or income-tax in respect of the income at the rates prescribed in Sub-paragraph I of paragraph A of Part III of First Scheduled of Finance Act, 1994 (Annexure I), if such income had been t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be deducted from interest payable on securities/bonds/debentures which have been specifically exempted from the requirement of tax deduction at source under the proviso to section 193, or, which have been specified by the Central Government by notification in the Official Gazette under the proviso to section 193. (f) 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. For instance, payments made to the Life Insurance Corporation, Unit Trust of India and the Small Industries Development Bank of India (SIDBI) are exempt from the requirement of tax deduction at source by virtue of their respective Acts. (g) the term "domestic company" means an Indian company or any other company which, in respect of its income liable to tax under the Income-tax Act, 1961, has made the prescribed arrangements for the declaration and payment within India, of the dividends (including dividends on preference shares) payable out of such income. (h) As provided by section 288B of the Income-tax Act fractions of one rupee cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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(2), 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 October 9, 1987*. 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 36A and 37 of the Income-tax Rules, the prescribed person in the case of every company, the prescribed person in the case of every office of Government, the principal officer in the case of every local authority or public body ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total income does not Nil; exceed Rs. 35,000 (2) where the total income exceeds 20 per cent of the amount by which Rs. 35,000 but does not exceed the total income exceeds Rs. 35,000; Rs. 60,000 (3) where the total income exceeds Rs. 5,000 plus 30 per cent of the Rs. 60,000 but does not exceed amount by which the total income Rs. 1,20,000 exceeds Rs. 60,000; (4) where the total income exceeds Rs. 23,000 plus 40 per cent of the Rs. 1,20,000 amount by which the total income exceeds Rs. 1,20,000 . 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. That the securities, particulars of which are given below, stand in my name and are beneficially owned by me, and the interest therefrom is not includible in the total income of any other person under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtend 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........................................ Place : ......................... ......................................................... Date : .......................... Signature of the person responsible for paying theinterest on securities ANNEXURE III FORM NO. 16A [See rule 31(1)(b)] Certificate of deduction of tax at source under section 203of the Income-tax Act, 1961 For interest on securities; dividends, interest other than 'interest on securities'; winnings from lottery or crossword puzzle; winnings from horse race; payments to contractors and sub-contractors; insurance com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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