1. Person Responsible for Deduction of Tax
a) Any person other than Individual or HUF responsible for paying interest other than interest on securities shall deduct TDS.
b) An Individual or HUF whose turnover from business exceeds 60Lakhs or gross receipts from profession exceed 15Lakhs shall deduct TDS on interest other than interest on securities.
2. Conditions For Deduction of TDS under Section 194A
Tax is deductible under section 194A only if following conditions are satisfied –
a) Interest is payable to a resident.
b) Interest is not chargeable to tax as interest on securities.
c) Interest is not exempted from tax deduction under Section 194A(3)
3. Time of Deduction of Tax at Source
TDS on interest other than interest on securities is to be deducted -
a) At the time of credit of such income to the account of payee; or
b) At the time of payment of interest on securities by cash or cheque
Whichever is earlier.
4. Deposit of Tax deducted at Source
Tax deducted at source has to be deposited to the credit of Central Government within prescribed time limits.
|S.No.||Particulars||Time of Deposit of TDS|
|1||Tax is deducted by office of Government and tax is paid without production of challan||On the same day on which the tax is deducted|
|2||Tax is deducted by office of Government and tax is accompanied by income tax challan||Within 7 days from the end of month in which TDS is deducted.|
|3||Tax deducted by any other person||a) For the month of March – April 30th b) Otherwise – Within 7 days from the end of month in which the TDS is deducted|
In special cases, Joint Commissioner may allow deposit of TDS on quarterly basis, In such cases, TDS shall be deposited within 7 days from the end of relevant quarter.
5. Issue of Certificate of TDS in Form 16A
Person deducting TDS under Section 193 shall issue TDS certificate in Form 16 A to deductee within prescribed time period.
|S.No.||Different Quarters||Tax deducted by office of Government||Tax deducted by any other person|
|1||Quarter Ending June 30th||On or before August 15th||On or before July 30th|
|2||Quarter Ending September 30th||On or before November 15th||On or before October 30th|
|3||Quarter Ending December 31st||On or before February 15th||On or before January 30th|
|4||Quarter Ending March 31st||On or before May 30th||On or before May 30th|
6. Submission of Quarterly Return
a) Deductor has to furnish quarterly return of TDS in Form 26Q to the government.
b) A control chart in Form 27 A is submitted along with Form 26Q.
7. Rate of TDS
TDS @ 10% is to be deducted while paying interest on securities. No Education Cess, SHEC, Surcharge needs to be deducted.