Budget 2023: Removal of exemption from TDS on payment of interest on listed debentures to a resident
Section 193 of the Act provides for TDS on payment of any income to a resident by way of interest on securities.
2. The proviso to section 193 of the Act provides exemption from TDS in respect of payment of interest on certain securities. Clause (ix) of the proviso to the aforesaid section provides that no tax is to be deducted in the case of any interest payable on any security issued by a company, where such security is in dematerialized form and is listed on a recognized stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (32 of 1956) and the rules made thereunder.
3. It is seen that there is under reporting of interest income by the recipient due to above TDS exemption. Hence, it is proposed to omit clause (ix) of the proviso to section 193 of the Act.
12. This amendment will take effect from 1st April, 2023.
[clause 81]
Extract of relevant clause of Finance Bill 2023
Clause 81 of the Bill seeks to amend section 193 of the Income-tax Act relating to interest on securities.
Clause (ix) of the proviso to the said section provides that no tax shall be deducted on interest payable on any security issued by a company, where such security is in dematerialised form and is listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 and the rules made thereunder.
It is proposed to omit the said clause.
This amendment will take effect from 1st April, 2023.
Extract of Relevant Amendment Proposed by Finance Bill, 2023
81. Amendment of section 193.
In section 193 of the Income-tax Act, in the proviso, clause (ix) shall be omitted.
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