Presentation is loading. Please wait.

Presentation is loading. Please wait.

TDS ON INTEREST PAYMENTS BY BANKS November, 2011.

Similar presentations


Presentation on theme: "TDS ON INTEREST PAYMENTS BY BANKS November, 2011."— Presentation transcript:

1 TDS ON INTEREST PAYMENTS BY BANKS November, 2011

2 TDS ON INTEREST INTEREST ON BANK DEPOSITS TDS applicable to interest on term / fixed deposits cumulative deposits reinvestment deposits variable / flexi deposits TDS not applicable to interest on recurring deposits deposits in savings bank accounts

3 GENERAL EXEMPTIONS Payments to the following persons are exempt from TDS u/s. 196 – Government RBI Mutual funds Corporations established under central Law whose income is exempt

4 TDS ON INTEREST EXEMPTIONS FROM TDS – Interest paid to banks, cooperative banks, financial institutions established under the law, LIC, UTI, Insurance companies Interest paid by a cooperative bank to its member or another cooperative society interest paid on deposits by primary agricultural credit society / primary credit society / cooperative land mortgage bank / cooperative land development bank Interest paid to notified institutions/associations/bodies Interest paid by banks and cooperative banks in respect of deposits other than time deposits

5 TDS ON INTEREST INTEREST ON BANK DEPOSITS interest payable on all the deposits in the branch standing in the name of a payee should be aggregated even if multiple Ids were alloted interest payable in the case of a deposit in joint names should be aggregated with the interest payable to joint account holder having higher interest income (circular No. 256)

6 CASES OF NON DEDUCTION / LOWER DEDUCTION Cases of payees other than company or firm who furnish declarations in form No 15G / 15H Cases of payees covered by certificate of non deduction or deduction at a lower rate issued by the Income tax department u/s.197

7 CONDITIONS FOR VALIDITY OF 15G / 15H DECLARATIONS Declarations should not be accepted routinely Blank / incomplete declarations are invalid Declaration in form No. 15G not valid if the amount paid / credited exceeds the tax exemption limit Declarations valid only for the assessment year mentioned therein

8 CONDITIONS FOR VALIDITY OF 15G / 15H DECLARATIONS Separate declarations required for each year of deposit Declarations to be obtained in each year afresh Declarations valid only for the payment / credit made subsequent to the date of declaration Declarations furnished without PAN are not valid with effect from 1-4-2010 Declarations to be forwarded to the jurisdictional Commissioner of Incometax on or before 7 th of the following month

9 CERTIFICATES OF NON-DEDUCTION/LOWER DEDUCTION Certificate valid prospectively from the date of its issue Valid till the end of the financial year only Valid to the extent of the interest payable amount mentioned therein

10 Instances of payments liable to TDS Payment of rent for the bank/ATM premises-194I Payment of car hire charges-194C Payment for hiring of equipment such as generator etc.,-194I Payment of courier charges -194C Payment of commission to recovery/mobilizing agents-194H Payment of fees for credit verification-194H Payment of fees for valuation of immovable properties/jewellery- 194J

11 Instances of payments liable to TDS Payment of fees to advocates/chartered accountants-194J Payment of fees to MICR centres for clearance of cheques/demand drafts-194J Payment of AMC charges for maintenance of generator/a.c./lift etc.-194C Payment of AMC charges for maintenance of computer/networking hardware/software-194J Payment of charges for supply of manpower for data entry-194C Payment of charges for security services-194C Payment towards cash management service-194J


Download ppt "TDS ON INTEREST PAYMENTS BY BANKS November, 2011."

Similar presentations


Ads by Google