Requirement of deduction of income-tax at source u/s. 193 of the IT Act-Payment of income by way of interest on securities to PFs established under a scheme under EPF and Miscellaneous Provisions Act, 1952, whose income is exempt u/s. 10(25)(ii) of the IT Act, 1961 - Income Tax - 741/1996

Requirement of deduction of income-tax at source u/s. 193 of the IT Act-Payment of income by way of interest on securities to PFs established under a scheme under EPF and Miscellaneous Provisions Act, 1952, whose income is exempt u/s. 10(25)(ii) of the IT Act, 1961 Circular No. 741 Dated 18/4/1996 Representations have been received for grant of exemption from the requirement of deduction of income-tax at source under section 193 of the Income-tax Act on the payment of income by way of interest on securities in case of provident funds established under a scheme framed under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, whose income is exempt under section 10(25)(ii) of the Income-tax Act, 1961. 2. The matter has been examined by the Board and it has been decided that in the case of a provident fund whose income is exempt under section 10(25)(ii) established under a scheme under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the income by way of interest on securities of the Central and State Governments may be paid to such provident funds without deduction of income-tax at source. The provisions of this circular will be applicable from the current financial year 1995-96 onwards. (Sd.) Y. P. Vashishat, Under Secretary (Budget).