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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 1991-92--Instructions regardingX X X X Extracts X X X X X X X X Extracts X X X X ..... ount, by whatever name called, shall be deemed to be a credit of such income to the account of the payee; (b) tax will not be deducted at source from any interest payable to a resident individual on debentures 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 amount of such interest paid or likely to be paid during the financial year by the company to such an individual does not exceed Rs.2,500; (c) tax will not be deducted at source under section 193 in the case of a resident individual who makes a declaration in Form No.15F to the effect that tax on his estimated total income of the financial year 1991-92 will be nil; (d) no tax will be deducted at source or it will be deducted at a lower rate in the case of a person other than a company where a certificate under section 197 is issued by the Assessing Officer specifying the rate of such deduction of tax at source. (4) The responsibilities, obligations, etc., under the Income-tax Act, of the person deducting tax at source, are as follows: (a) According to the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end to Rs.200 for every day during which the failure continues. (c) According to the provisions of section 203A, it is obligatory for all persons 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 9-10-1987 (See [1988] 169 ITR (St.) 54). If a person fails to comply with the 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 office of Government, the principal officer in the case of every company, the prescribed person in the case of every local authority or other public body or association, every private employer and every other person responsible for deducting tax at source shall prepare and deliver by the 30th June following the financial year, to the designated/concerned Assessing Officer, the annual return of deduction of tax from interest on securities in Form No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the income at the rates prescribed in Sub-paragraph I of Paragraph A of Part III of the First Schedule to the Finance Act, 1992 (vide Annexure I), if such income had been the total income, whichever is higher. (2) In the case of any other person,— (A) on the income by way of interest on a tax-free security 15 per cent (B) on the whole of other income (excluding interest payable on a tax-free security) [As against 1(c) above] II. In the case of a company;— (i) where the company is a domestic company - on income by way of interest on securities (excluding interest payable on a tax-free security) 21.5 per cent (ii) where the company is not a domestic company— (A) on interest payable on a tax-free security 44 per cent (B) on interest on other securities 65 per cent. Surcharge on income-tax The amount of tax deducted as per the rates given above shall be increased :— (i) by a surcharge for purposes of the Union @ 12% of such income-tax in the case of a resident person other than a company; and (ii) by a surcharge @ 15% of such income-tax in the case of a domestic company. 4. The term "domestic company" means an Indian company or any other company whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by you on or before the seventh day of the month next following the month in which the declaration is furnished to you, to the Chief Commissioner/Commissioner of Income-tax concerned, as provided in rule 29C(5) of the Income-tax Rules, 1962; (vi) 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. Payments made to Life Insurance Corporation and Unit Trust of India are exempt from the requirement of T.D.S. by their respective Acts. (vii) under section 288B of the Income-tax Act, fractions of one rupee contained in the amount of tax will have to be rounded off to the nearest rupee by ignoring amounts less than fifty paise and increasing amounts of fifty paise or more to one rupee. Hence, the amount of tax to be deducted at source should be rounded off to the nearest rupee in accordance with the aforesaid provisions of the Act. 6. The responsibilities, obligations, etc., under the Income-tax Act, of the person deducting tax at source, are as follows: (a) According to the provisions of section 200, any person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery day during which the failure continues. (c) According to the provisions of section 203A, it is obligatory for all persons 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 9-10-1987 (See [1988] 169 ITR (St.) 54). If a person fails to comply with the 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 office of Government, the principal officer in the case of every company, the prescribed person in the case of every local authority or other public body or association, every private employer and every other person responsible for deducting tax at source shall prepare and deliver by the 30th June following the financial year, to the designated/concerned Assessing Officer, the annual return of deduction of tax from interest on securities in Form No.25. It may be noted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surcharge for purposes of the Union calculated at the rate of twelve per cent of such income-tax : Provided that no such surcharge shall be payable by a non-resident. 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 sections 60 to 64 of the Income-tax Act, 1961 : Description of securities Number of securities Dates of securities Amount of securities Date(s) on which the securities were acquired by the declarant 2. that my present occupation is............. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest 5. Date on which interest is paid Forwarded to the Chief Commissioner or Commissioner of Income-tax,........................... ................................. Signature of the person Place........ responsible for paying Date......... interest on securities. ANNEXURE III FORM NO. 16A [See Rule 31(1)(b)] Certificate of deduction of tax at source under section 203 of the Income-tax Act, 1961 [For interest on securities; dividends; interest on time deposits referred to in clauses (vii) and (viia) of sub-section (3) of section 194A; insurance commission; payments in respect of deposits under National Savings Scheme; payments on account of repurchase of units by the Mutual Fund or Unit Trust of India; commission, remuneration or prize on sale of lottery tickets; commission or brokerage; income from units referred to in section 196B]. Name and address of the TDS circle Name and address of the person deducting tax where Annual person to whom payment ................................................ Return under is made or in whose ................................................ section 206 is to account it is credited ............................. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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