Tax Deducted at Source (TDS) is an indirect method of Collecting tax which aims at the collection of revenue at the very source of Income. The assessee can view the details of TDS deducted in Form 26AS. This Form 26AS contains all the details of tax directly paid by the taxpayer to the government as advance tax or self assessment tax. Here now in this article the assessee can check What is TDS on Interest other than Interest on Securities, Who must deduct tax at Source, When tax is to be deducted, Rate of TDS, etc.
TDS on Interest other than Interest on Securities
Section 194A of Income Tax Act
The Section 194A explains the provisions relating to TDS on interest other than on securities. This Tax is deducted under section 194A if the interest other than interest on securities is paid to a resident. If in case the payment of interest to a non-resident then the provisions of Section 194A is not applicable.
Who must deduct tax at source?
Every person other than an individual or an HUF (Hindu undivided family) who is responsible to pay interest that is interest other than on securities to a resident is liable to deduct TDS under section 194A.
If the total sales, gross receipts or turnover from the business or profession carried by an individual or an HUF exceeds the monetary limits specified under Section 44AB during the FY (Finacial Year) immediately preceding the FY in which the aforesaid amount is credited or paid, shall be liable to deduct TDS under section 194A. It means any individual or HUF was liable to get his/its accounts audited under section 44AB in the preceding financial year then he is liable to deduct TDS under Section 194A.
When Tax is to be Deducted?
Tax Deducted at Source is applicable only if the Interest exceeds Rs. 50,000/- as per Section 194A.
Rate of TDS
According to the Section 194A
Rate of Tax deducted = 10% from the amount of Interest
If the taxpayer did not furnish his PAN (Permanent Account Number) then he is to be deducted the higher of the following:
- At the Rates prescribed in the relevant provision of the Income Tax Act.
- At the rates prescribed in the Finance Act.
- At the rate of 20%.
Due Dates to make the TDS Payment
These are the following dates which TDS payment is to made on the interest which is collected by the non-Government deductor and is to be paid to the credit of the Central Government.
- Tax deducted during the month of April to February should be paid to the credit of the Government on or before 7 days from the end of the month in which the tax is deducted.
- Tax deducted during the month of March should be paid to the credit of the Government on or before 30th of April.
Interest for delay in payment of TDS
If any delay in payment of TDS then such person shall be liable to pay simple interest at following rates:
- Interest shall be levied at the rate of 1% for every month or part of a month on the amount of such tax for the delay in deduction.
- For every month or part of a month Interest at the rate of 1.5% shall be levied on the amount of such tax for the delay in payment after deduction.
Issuance of TDS certificate
The TDS Certificate is to be furnished by the deductor to the deductee in form no. 16A for the deducted on payments other than salary. For the following dates, the certificate should be issued on the quarterly basis:
|Quarter||Due date for Non-Government deductor|
|April to June||30th July|
|July to September||30th October|
|October to December||30th January|
|January to March||30th May|
Due Dates for filing TDS Return
These are the due dates for filing the quarterly TDS return by a non-Government deductor:
|Quarter||Due date of filing of TDS return|
|April to June||15th July|
|July to September||15th October|
|October to December||15th January|
|January to March||15th May|