3.5. DEEUCTION OF TAX FROM INTEREST OTHER THAN INTEREST ON SECURITIES [ SECTION 194A]
The Provisions of section 194A are given below---
Who is the taxpayer |
Any person paying interest other than interest on securities ( not being an individual or a Hindu Undivided Family whose books of accounts are not required to be audited u/s 44AB ) |
Who is the recipient |
A Resident Person |
Payment covered |
Interest other than interest on securities |
At what time tax has to be deducted at source |
At the time of payment or at the time of credit, whichever is earlier. |
Maximum amount which can be paid without Tax Deduction |
From June 1, 2007 tax is not deductible if payment / credit does not exceed the specified amount. |
Rate of tax deducted at source |
10% if the recipient is resident non-corporate assessee and 20% if the recipient is resident corporate assessee. |
When Taxis not required to be Deducted at Source : Following interest payments are not subjected to TDS.
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When the aggregate of inters during the financial year is Rs.5,000 or less.
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Where interest is paid to any building company or co-operative society, LIC, UTI or any company or co-operative society carrying on the business of insurance or any financial corporation or nay institution as the Central Government may notify in the official gazette.
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Any scheme maintained at the post office.
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Interest paid by a firm to its partner.
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Where a declaration in Form 15G is furnished by the assessee.
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