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.
|Person Responsible to Deduct Tax||All 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 Limit||Payment 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
|Time of Deduction of TDS||At the time of payment or credit whichever is earlier|
|Time for Deposit of TDS||Within one week from the last day of the month of tax deduction. For month of March, before 30th April.|
|Certificate of TDS||Form 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 TDS||In 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 Deduction||Yes, Application in Form No. 13, Appropriate Certificate to be issued by AO|
|Is Self Declaration by Payee for Non Deduction Admissible||Yes 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?
- 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.
- 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%.