194A. (1) Any
person, not being an individual or a Hindu undivided family, 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:
[Provided that
an individual or a Hindu undivided family, whose total sales, gross receipts or
turnover from the business or profession carried on by him exceed the monetary
limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the
financial year in which such interest is credited or paid, shall be liable to
deduct income-tax under this section.]
[Explanation.—For the purposes of this section, where any income by way
of interest as aforesaid is credited to any account, whether called
"Interest payable account" or "Suspense account" or by any
other name, in the books of account of the person liable to pay such income,
such crediting shall be deemed to be credit of such income to the account of the
payee and the provisions of this section shall apply accordingly.]
(2) [Omitted by the Finance
Act, 1992, w.e.f. 1-6-1992.]
(3) The provisions of sub-section
(1) shall not apply—
[(i) where the amount of 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 person referred to in
sub-section (1) to the account of, or to, the payee, [does not exceed—
(a) ten thousand rupees, where the payer is 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);
(b) ten thousand rupees, where the payer is a
co-operative society engaged in carrying on the business of banking;
(c) ten thousand rupees, on any deposit with post
office under any scheme framed by the Central Government and notified by it in this behalf; and
(d) five thousand rupees in any other case]:]
[Provided that in
respect of the income credited or paid in respect of—
(a) Time deposits 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); or
(b) Time deposits with a co-operative society engaged
in carrying on the business of banking;
(c) deposits with a public company which is formed and
registered in India with the main object of carrying on the business of
providing long-term finance for construction or purchase of houses in India for
residential purposes [and which
is eligible for deduction under clause (viii) of sub-section (1) of section 36]
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;]
( ii) To such income credited or paid to—
(a) Any banking company to which the Banking Regulation
Act, 1949 (10 of 1949), applies, or any co-operative society engaged in
carrying on the business of banking (including a co-operative land mortgage
bank), or
(b) Any financial corporation established by or under a
Central, State or Provincial Act, or
(c) The Life Insurance Corporation of India established
under the Life Insurance Corporation Act, 1956 (31 of 1956), or.
(d) The Unit Trust of India established under the Unit
Trust of India Act, 1963 (52 of 1963), or
(e) Any company or co-operative society carrying on the
business of insurance, or
(f) 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;
[(iv) To such income credited or paid by a firm to a
partner of the firm;]
(v) To such income credited or paid by a co-operative
society [to a member thereof or]
to any other co-operative society;]
[(vi) 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;
[(vii) 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);
(viia) 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 referred to in sub-clause (a), engaged in carrying on the business of banking;]
[(viii) 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);]
[(ix) to such income credited or 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 credited or paid during the financial year does not exceed fifty
thousand rupees;]
[(x) 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].]
[Explanation 1.—For the purposes of clauses (i), (vii) and
(viia), "time
deposits" means deposits (excluding recurring deposits) repayable on the
expiry of fixed periods.
Explanation 2.
[(4) The person responsible for
making the payment referred to in sub-section (1) may, at the time of making
any deduction, increase or reduce the amount to be deducted under this section
for the purpose of adjusting any excess or deficiency arising out of any
previous deduction or failure to deduct during the financial year.]
Explanation.—[Omitted
by the Finance Act, 1992, w.e.f. 1-6-1992.]
Tags-section 194a tds,tds section 194a,tds on interest,tds on interest on securities,income tax section 194a,section 194a of income tax,section 194a of income tax act,tds rate on interest on securities
