Amendment of section 193.
69. In section 193 of the Income-tax Act, in the proviso, for clause (v), the following clause shall be substituted with effect from the 1st day of July, 2012, namely:—
“(v) any interest payable to an individual or a Hindu undivided family, who is resident in India, on any debenture issued by a company in which the public are substantially interested, if—
(a) the amount of interest or, as the case may be, the aggregate amount of such interest paid or likely to be paid on such debenture during the financial year by the company to such individual or Hindu undivided family does not exceed five thousand rupees; and
(b) such interest is paid by the company by an account payee cheque;”.
Notes on Clauses:
Clause 69 of the Bill seeks to amend section 193 of the Income-tax Act relating to interest on securities.
Under the existing provisions contained in clause (v) of the aforesaid section 193, no tax is required to be deducted from any interest payable to an individual who is resident in India, on debentures issued by a company in which the public are substantially interested, if such debentures are listed on a recognised stock exchange in India; the interest is paid by the company by an account payee cheque; and the aggregate amount of interest payable by the company to such individual does not exceed two thousand and five hundred rupees. It is proposed to substitute the aforesaid clause so as to provide that no deduction of income tax shall be made on any interest payable to an individual or a Hindu undivided family, who is resident in India, on any debenture issued by a company in which the public are substantially interested, 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 of the amounts of such interest paid or likely to be paid during the financial year by the company to such individual or a Hindu undivided family does not exceed five thousand rupees.
This amendment will take effect from 1st July, 2012.
