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    Any person making interest payments of over Rs. 5,000 annually to a resident individual must deduct a 10% tax at source, unless the interest is: 1) on Central or State government securities, 2) paid to notified financial organizations like banks or LIC, or 3) paid by a company on dematerialized securities. Tax must be deducted from interest on bonds, debentures, and securities issued by governments, companies, or statutory corporations.

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    Any person making interest payments of over Rs. 5,000 annually to a resident individual must deduct a 10% tax at source, unless the interest is: 1) on Central or State government securities, 2) paid to notified financial organizations like banks or LIC, or 3) paid by a company on dematerialized securities. Tax must be deducted from interest on bonds, debentures, and securities issued by governments, companies, or statutory corporations.

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    5 views1 page

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    Uploaded by

    Rahul
    Any person making interest payments of over Rs. 5,000 annually to a resident individual must deduct a 10% tax at source, unless the interest is: 1) on Central or State government securities, 2) paid to notified financial organizations like banks or LIC, or 3) paid by a company on dematerialized securities. Tax must be deducted from interest on bonds, debentures, and securities issued by governments, companies, or statutory corporations.

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    Every person responsible for making payment of interest on securities to any resident shall deduct

    tax at source @ 10% provided the amount being paid or payable during a particular year to a
    particular person is exceeding `5,000. No tax shall be deducted at source in the following cases: 1.
    Any interest payable on any security of the Central Government or a State Government. 2. Any
    interest being paid to Bank/LIC or other notified financial organizations. 3. Interest payable by a
    company in connection with security held in dematerialised form. “Interest on securities” as per
    section 2(28B), interest on securities means interest on bond / debenture etc. issued by Government
    / local authority / company or statutory corporation etc. Example (i) ABC Ltd. has to pay interest of

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