Section 194A – TDS Interest other than Interest on Securities F.Y.2019-20

Here we will discuss about the complete detail about TDS deduction on interest other than interest on securities u/s 194A. You can find here TDS rates, exemption limit, responsible persons, time of deduction, TDS returns, time limit for deposit TDS and more.

Quick Summary

Person Responsible to Deduct TaxAll Assessee except those individual and HUF who are not covered u/s 44 AB (a) or 44 AB (b) in the preceding previous year.
Exemption LimitPayment of interest by banks to Sr Citizens Rs.50,000

Payment of interest by banks to others Rs.40,000

Payment of interest by others Rs.5,000

TDS Rates10%
Time of Deduction of TDSAt the time of payment or credit whichever is earlier
Time for Deposit of TDSWithin one week from the last day of the month of tax deduction. For month of March, before 30th April.
Certificate of TDSForm 16A for each quarter is to be issued within 15 days from the due date for furnishing the statement of tax deducted at source under rule 31A i.e. on or before 15th August, 15th November, 15th February and 15th June
Quarterly Return of TDSIn Form No.26Q on or before 31st July, 31st October and 31st January for the first three quarters and on or before 31st May for the last quarter
AO’s Certificate for Deduction at Lower Rate or Non DeductionYes, Application in Form No. 13, Appropriate Certificate to be issued by AO
Is Self Declaration by Payee for Non Deduction AdmissibleYes it can filed, by person other than Company or Firm, Declaration to be submitted in duplicate in Form No. 15G/ 15H.

Who is liable to deduct tax on interest other than interest on securities?

  1. The payer (who are paying interest to the payee) including company (principal Officer) except those individuals and HUF who were not covered u/s 44AB(a) or 44AB(b) in the preceding previous year.
  2. So individuals and HUF who were covered u/s 44AB(a) or 44AB(b) in the immediately preceding financial year, are also required to deduct tax at source.

However, individuals and HUF who were not covered u/s 44AB(a) and (b) like whose turnover/receipts does not exceeds Rs.1,00,00,000/25,00,000 as the case may be are not required to deduct TDS on commission & brokerage.

TDS Rates on Interest other than Interest on Securities

  • In case the payee is a person other than a company resident in India – 10%
  • In case the payee is a domestic company 10%

The rate of TDS will be 20% in all cases, if PAN is not quoted by the deductee

No surcharge, education cess and SHEC shall be added. Hence, TDS shall be deductible at basic rates.

Time of deduction of TDS

Tax is to be deducted either at the time of payment of interest is cash or by issue of cheque or draft or by any other mode or credit of it to any account, whichever is earlier.

Thus, section 193 does not requires tax to be deducted at source in respect of the provision for interest accrued but not due, made by an assessee where the ultimate recipient of such interest accrued but not due, cannot be ascertained at the point of time when the provision is made.

Time Limit for Deposit of TDS

When the tax deducted by the office of the Government: 

  • On the same day where the tax is paid without production of income-tax challan; and 
  • On or before seven days from the end of the month in which the deduction is made, where tax is paid accompanied by an income-tax challan.

In any other cases

  • The TDS has to be deposited on or before 30th day of April, where the income or amount is credited or paid in the month of March; and 
  • In any other cases, on or before seven days from the end of the month in which the deduction is made. 

Time Limit to Issue TDS Certificate (Form 16)

The dates when the deductor is responsible to issue Form No.16 (TDS certificate) to the deductee, is within 15 days from the due date for furnishing the statement/returns of tax deducted at source under rule 31A.

Please keep in mind w.e.f. 1-6-2016, the due dates to deposit TDS Returns/Statement has changed. Check here complete detail.

  • 15th August
  • 15th November
  • 15th February
  • 15th June

Statement/TDS returns formalities/dates

The deductor is responsible to submit TDS statement/TDS returns in Form No. 26Q on or before

  • 31st July
  • 31st October
  • 31st January
  • 31st May

Is any provision for non-deduction of tax?

The deductee should provide the form no.15G to the deductor for non-dedution of TDS in the case of individuals. The form no. 15H should be submitted in case of Senior citizens. In case of any declaration invalid the deductor shall dedect the tax @ 20%.

Categories TDS

5 thoughts on “Section 194A – TDS Interest other than Interest on Securities F.Y.2019-20”

  1. My father is a senior citizen having a deposit of Rs 100000.00 in a nationalised bank. He had provided my name as nominee. He has also submitted 15 H so that tax is not deducted at sournce.

    Due to returns filed by the bank, in the first quarter the interest is shown as credited in Form 26 AS.

    In the second quarter the same is shown in my 26AS as interest credited under 15 H category with no TDS.( may be because i have my account there the bank has my PAN number) I am a assessee paying tax and regularly filing the IT return. I have a extraneous credit in my 26 AS now.

    We have jointly taken up the matter with the bank, there is no development.

    Filing of my annual return is due now.. Kindly guide me
    thanks

    krishnan

  2. Sir I file the TDS returns of my client wherein for form26Q my client has all the deductees with no PAN. Also my client deducts TDS @ 20% and I file the returns accordingly. however I am getting PAN errors default when the returns have been processed by TRACES. Kindly provide me solution for how to rectify the errors.

    • Hello Sir, There is an option to tick while entering TDS entry that it is an entry without PAN. So you have to check that option. Again if you got problem then please ask again but with complete detail like what software you are using? What exactly the message was appearing? Thanks..

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