Updated on November 26, 2024 12:31:17 PM
Section 193 of The Income Tax Act, 1961 is an important provision which governs TDS on Interest on securities.This section covers amount of TDS to be deducted and deposited by a person who is responsible for paying to a resident indian any income by way of interest on securities. You will learn about rate of TDS, timing of when to deduct and deposit, penalties associated with TDS on interest on securities under Section 193 of Income tax act. Bizfoc is a leading tax consultant who has an expertise in TDS consultancy provided to clients within India & NRI outside India.
The provisions related to interest on securities are defined in section 193 of the Income Tax Act,1961. As per this section, if any person pays to an Indian resident any income in the form of interest on securities, then the said person (payer) is liable to deduct tax at source under section 193. First let's understand what is the meaning of interest on securities which is defined under Section 2(28B) of Income tax act.
Interest on securities is defined under [section 2(28B)]
The section 193 of income tax act covering TDS on interest on securities is applicable to any person paying interest on securities to a resident person of India.
No tax deduction is to be made from any interest payable under following circumstance:
[Note – It may be noted that tax has to be deducted at source in respect of interest payable on 8% Savings (Taxable) Bonds, 2003, or 7.75% Savings (Taxable) Bonds, 2018, only if such interest payable exceeds 10,000 during the financial year.]
Threshold limit under section 193 covering TDS on Interest on securities is:
Rate of TDS given under section 193 [TDS on interest on securities ] is 10%, both in the case of domestic companies and non-corporate resident assessees.
TDS on interest on securities under section 193 @ 10% will be deducted:-
TDS on Interest on securities which is deducted and is required to be deposited to the central government. Time to deposit of TDS on Interest on securities is below:
When TDS is deducted | When to deposit TDS |
---|---|
April - February | on or before 7th of next month |
March | On or before 30th April |
Here are the penalties and fines for TDS on interest on securities.
At Bizfoc, we specialize in providing you the best accounting services in filing your TDS. Here are the reasons why we are known for our services to our clients on filing TDS:
In general, we assist the client to solve their queries and doubts regarding the documentation, procedures, and fees for filling out the form. Other than making your filing successful, we help you make a better decision by covering every aspect of what you actually need to get your TDS.
In conclusion, section 193 of The Income Tax Act,1961 covers details about TDS on Interest on securities which ensures that tax is appropriately deducted at source at time of payments of Interest on securities, which will ultimately be deposited with the government. Compliance with this section is essential for both payers and recipients to avoid penalties and interest.
Yes, certain interest payments may be exempt if the recipient provides necessary documentation or if the interest amount falls below the specified threshold. Additionally, interest paid to certain government entities or institutions may also be exempt.
The deductor must file TDS returns using Form 24Q, which reports the TDS deducted on salaries and interest payments.
The procedure involves:
The deductor should maintain: