Income-tax Act,1961
Act No : 43
Section :
Interest on securities 2.
1 193. Interest on securities 2 The person responsible for paying any income 3[by way of interest on ---------------------------------------------------------------------- 3 Substituted for "chargeable under the head 'Interest on securities' " by the Finance Act, 1988, w.e.f. 1-4-1989. ----------------------------------------------------------------------- 1.609 securities] shall, 1[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 * *] at the rates in force on the amount of the interest payable: 3[Omitted by the Finance Act, 1992, w.e.f 1-6-1992.1 4[Provided 5[* * *] that no tax shall be deducted from- (i) any interest payable on 41/4 per cent National Defence Bonds, 1972, where the bonds are held by an individual, not being a non-resident; or 6[(ia) any interest payable to an individual on 4 1/4 per cent National Defence Loan, 1968, or 4 2/4 per cent National Defence Loan, 1972; or] 7[(ib) any interest payable on National Development Bonds; or] 8[(ii) * * *] 9[(iia) any interest payable on 7-Year National Savings Certificates (IV Issue); or] 10[(iib) any interest payable on such debentures, issued by any institution or authority, or any public sector company, or any co-operative society (including a co-operative land mortgage bank or a co-operative land development bank), as the Central Government may, by notification" in the Official Gazette, specify in this behalf. ----------------------------------------------------------------------- 1 Substituted by the Finance Act, 1989, w.e.f. 1-6-1989. 2 The words "and super-tax" omitted by the Finance Act, 1965, w.e.f. 1-4-1965. 3 Prior to the omission, the proviso, as inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991, read as under: "Provided that where, in the case of a scheduled bank, the Central Government is satisfied that the total income of the bank justifies deduction of income-tax at a lower rate, it may, by notification in the Official Gazette, specify the rate at which deduction of income-tax shall be made in the case of such bank under this section and such notification shall, at any one time, have effect for such assessment year or years, not exceeding three assessment years, as may be specified in the notification:" 4 Substituted by the Finance (No. 2) Act, 1965, w.e.f. 11-9-1965. Earlier, it was inserted by the Taxation Laws (Amendment) Act, 1962, w.e.f. 13-12-1962. 5 The word "further" omitted by the Finance Act, 1992, w.e.f. 1-6- 1992. It was inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10- 1991. 6 Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1965, w.e.f. 4-12-1965. 7 Inserted by the Finance Act, 1978, w.e.f. 1-4-1978. 8 Omitted by the Finance Act, 1988, w.e.f. 1-4-1989. Prior to the omission, clause (ii) read as under: "(ii) any interest payable on National Savings Certificates (First Issue); or" 9 Inserted by the Finance Act, 1970, w.e.f. 1-4-1970. 10 Substituted by the Finance Act, 1986, w.e.f. 1-6-1986. Prior to the substitution, clause (iib), as inserted by the Finance Act, 1970, w.e.f. 1-4-1970, read as under: "(iib) any interest payable, on such debentures, issued by any co-operative society (including a co-operative land mortgage bank or a co-operative land development bank) or any other institution or authority, as the Central Government may, by notification in the Official Gazette, specify in this behalf; or" ----------------------------------------------------------------------- 1.610 1[Explanation.-* * *]] (iii) any interest payable on 61/2 per cent Gold Bonds, 1977, or 7 per cent Gold Bonds, 1980, where the Bonds are held by an individual not being a non-resident, and the holder thereof makes a declaration in writing before the person responsible for paying the interest that the total nominal value of the 6 1/2 per cent Gold Bonds, 1977, or, as the case may be, the 7 per cent Gold Bonds, 1980, held by him (including such bonds, if any, held on his behalf by any other person) did not in either case exceed ten thousand rupees at any time during the period to which the interest relates;] 2[(iiia) 'any interest payable on such securities of the Central Government or a State Government, to such class of persons, and subject to such conditions, as the Central Government may, by notification in the Official Gazette, specify in this behalf;] 4[(iv)any interest payable on any other security of the Central or State Government, where the security is held by an individual, not being a non-resident, and the holder thereof makes a declaration in writing before the person responsible for paying the interest that- (a) he has not previously been assessed under this Act or under the Indian Income-tax Act, 1922 (11 of 1922); (b) his total income of the previous year in which the interest is due is not likely to exceed the maximum amount not chargeable to tax; and (c) the total nominal value of the securities held by him (including such securities, if any, as are held on his behalf by any other person) did not exceed two thousand five hundred rupees at any time during the said previous year;] 5[(v) any interest payable to an individual, who is resident in India, on debentures issued by a company in which the public are substantially interested, being debentures listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder, if- (a) the interest is paid by the company by an account payee cheque; and (b) the amount of such interest or, as the case may be, the aggregate of the amounts of such interest paid or likely to be paid during the financial year by the company to such ---------------------------------------------------------------------- 1 Explanation omitted by the Finance Act, 1987, w.e.f. 1-4-1987. Prior to the omission, the Explanation, as substituted by the Finance Act, 1986, w.e.f. 1-6-1986, read as under: "Explanation.-For the purposes of this clause, "public sector company" means any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); or" 2 Inserted by the Finance Act, 1982, w.e.f. 1-6-1982. 4 Inserted by the Finance Act, 1966, w.e.f. 1-4-1966. 5 Inserted by the Finance Act, 1984, w.e.f. 1-6-1984. ----------------------------------------------------------------------- 1.611 individual does not exceed [two thousand and five hundred rupees].] 2[Explanation 3[* * *].-For the purposes of -this section, where any income by way of interest on securities 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.] 4 [Omitted by the Finance Act, 1992, w.e.f 1-6-1992.]
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