SECTION 194A Tds on interest other than "interest on securities"

Any person, (not being an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him does not exceed the monetary limits specified under clause [a] or clause [b] of section 44AB during the financial year immediately preceding the financial year) who is responsible for paying to a resident any income by way of interest other than income by way of interest on securities, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force :

[1] If such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the banking company or cooperative bank or post office exceeds  ₹40,000. [In case of payee being senior citizen the ₹40,000 limit is substituted with ₹50,000].

[2] In any other case if exceeds ₹5000.

Provided the aforesaid amount shall be computed with reference to the income credited or paid by a branch of the banking company or the co-operative society or the public company, as the case may be.

The provisions of this section shall not apply

(1) to such income credited or paid to—

✓any banking company or any co-operative bank or

✓any financial corporation established by or under a Central, State or Provincial Act, or

✓the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 or

✓the Unit Trust of India established under the Unit Trust of India Act, 1963, or

✓any company or co-operative society carrying on the business of insurance, or

✓such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette;

(2) to such income credited or paid by a firm to a partner of the firm;

(3) to such income credited or paid by a co-operative society [other than a co-operative bank] to a member thereof or to any other co-operative society;

(4) to such income credited or paid in respect of deposits under any scheme framed by the Central Government and notified by it in this behalf in the Official Gazette;

(5)to such income credited or paid in respect of deposits [other than time deposits made on or after the 1st day of July, 1995] with a banking company to which the Banking Regulation Act, 1949 [10 of 1949] applies [including any bank or banking institution referred to in section 51 of that Act];

(6) to such income credited or paid in respect of,—

[a] deposits with a primary agricultural credit society or a primary credit society or a co-operative land mortgage bank or a co-operative land development bank;

[b] deposits [other than time deposits made on or after the 1st day of July, 1995] with a co-operative society, other than a co-operative society or bank engaged in carrying on the business of banking;

(7) to such income credited or paid by the Central Government under any provision of this Act or the Indian Income-tax Act, 1922 [11 of 1922], or the Estate Duty Act, 1953 [34 of 1953], or the Wealth-tax Act, 1957 [27 of 1957], or the Gift-tax Act, 1958 [18 of 1958], or the Super Profits Tax Act, 1963 [14 of 1963], or the Companies [Profits] Surtax Act, 1964 [7 of 1964], or the Interest-tax Act, 1974 [45 of 1974];

(8) to such income credited by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal;

(9) to such income paid by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income paid during the financial year does not exceed fifty thousand rupees;

(10) to such income which is paid or payable by an infrastructure capital company or infrastructure capital fund or a public sector company or scheduled bank in relation to a zero coupon bond issued on or after the 1st day of June, 2005 by such company or fund or public sector company or scheduled bank;

(11) to any income by way of interest referred to in clause [23FC] of section 10

Provided that a co-operative society referred to in point (3) or (6) above shall be liable to deduct income-tax in accordance with this section

if—

(a) the total sales, gross receipts or turnover of the co-operative society exceeds fifty crore rupees during the financial year immediately preceding the financial year in which the interest is credited or paid, and

(b)  the amount of interest, or the aggregate of the amounts of such interest, credited or paid, or is likely to be credited or paid, during the financial year is more than ₹50,000 in case of payee being a senior citizen and ₹40,000 in any other case.

         {Income tax india}

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