Section - 194A TDS on Interest other than Interest on Securities
Section 194A deals with deduction of TDS on interest other than interest on securities like Interest on Fixed Deposits, Interest on Loans and Advances other than banks.
CBDT issued a circular on 25th June 21 extending some timelines for AY 21-22
(i) The due date to file TDS return for Q4 of the FY 2020-21 is extended from 30th June 21 to 15th July 21.
(ii) The due date to furnish the TDS Certificate to employees in Form No. 16 is extended from 15th July 21 to 31st July 21.
What is Section 194A?
This section is only applicable to a resident. Thus, the provisions of section 194A are not applicable in case of payment of interest to a non-resident.
Payments made to non-residents are also covered under TDS mechanism. However, tax in such a case is to be deducted as per Section 195.
When does TDS under Section 194A need to be deducted?
The payer/deductor shall deduct TDS if the amount of such interest paid or credited or is likely to be paid or credited in a financial year, exceed
40,000 where the payer is
Banking company or any bank or a banking institution
Co-operative society engaged in the business of banking
Post office (on deposit under scheme framed and notified by Central Government).
5,000 in any other case
- From FY 2018-19 onwards no TDS will be deducted on interest earned upto INR 50,000 by senior citizens. The interest amount should be earned from the following:
When is Tax deducted at NIL rate or lower rate?
What is the rate of TDS?
Following are the applicable rates of taxes:
10% when the PAN is furnished (the rate is 7.5% for interest credited from 14th May, 2020 until 31st March, 2021 as a COVID-19 relief measure);
20% if the PAN is not provided.
No surcharge, education cess or SHEC shall be added to the above rates. Hence, tax will be deducted at source at the basic rate.
What is the time limit for depositing TDS ?
Tax Deducted during the month of April to February is to be deposited on or before the 7th of next month. Tax Deducted in the month of March is to be deposited on or before 30th April.
For example, tax deducted on 25th April is to be deposited on or before 7th May and tax deducted on 15th march is to be deposited on or before 30th April.
For more information on this, visit TAXAJ
Posted by Aashima
Team TaxaJ
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