Amendment of section 197A.
62. In section 197A of the Income-tax Act, after sub-section (1D), the following sub-section shall be inserted, namely:—
"(1E) Notwithstanding anything contained in this Chapter, no deduction of tax shall be made from any payment to any person for, or on behalf of, the New Pension System Trust referred to in clause (44) of section 10.".
Notes on Clauses:
Clause 62 of the Bill seeks to amend section 197A of the Income tax Act which relates to no deduction to be made in certain cases.
Under the existing provisions contained in section 197A, no tax is deducted at source on certain incomes, if the deductee files a declaration in the prescribed form and in the case of an offshore banking unit on interest paid to non-resident or a person not ordinarily resident in India subject to fulfilment of certain conditions. It is proposed to insert a new sub-section (1E) so as to provide that no deduction of tax shall, notwithstanding anything contained in this Chapter be made from any payment to any person for, or on behalf of, the New Pension System Trust.
This amendment will take effect retrospectively from 1st April, 2009.
