Section 193- TDS on Interest on Securities

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TDS shall be deducted on interest paid on securities by the interest payer.

  1. Time of Deduction- TDS to be deducted at the time of credit or payment, whichever is earlier.
  2. Deductee- The interest receiver needs to be a Resident
  3. TDS Rate- TDS at a flat rate of 10% shall be applicable.

If PAN is not furnished, then tax to be deducted at a higher rate

  1. Meaning of Interest on Securities-

a. Interest on any security of Central Government or State Government

b. Interest on debentures or

c. Interest on other securities for money issued by or on behalf of a local authority or a company or a corporation established by a Central, State or Provincial Act.

5. Cases when TDS shall not be deducted-

a. Interest payable to Insurance companies

b. Interest paid by widely held company (where interest amount is not more than Rs. 5,000) subject to certain conditions

c. Any interest payable on a dematerialized security recognized by a stock exchange.

d. Any interest payable on Central Govt securities or State Govt securities.

e. Interest paid or credited on 8% saving (Taxable) Bonds 2003 issued by the Central Government (where interest amount is not more than Rs. 10,000).

f. Where a self-declaration under Form No. 15G/15H is furnished by a particular person.

g. Any payment made to New Pension System Trust

h. No deduction of tax from specified payment to notified institutions, association, or body, etc.

i. No TDS shall be deducted at source from the payments of the nature specified under section 10(23DA) received by any securitization trust.

j. Certain entities whose income is unconditionally exempt under section 10

˜Authored by – CA Anushka Saraogi˜

Section 194IB-TDS on payment of Rent of Immovable Property by Certain Individuals or HUF

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