FINANCIAL YEAR 1986-87
1717. Instructions for deduction of tax at source from interest on securities during financial year 1986-87 at the rates specified in Part III of First Schedule to Finance Act, 1986
1. I am directed to invite a reference to this Department’s Circular No. 427 [F. No. 275/25/85-IT(B)], dated 31-7-1985 on the above subject, wherein you were requested to issue necessary instructions for making deduction of income-tax at source from the payment of “Interest on Government securities” at the rates prescribed therein for the financial year 1985-86. A draft circular to be issued to all Treasury Officers, etc., by your office had also been enclosed therewith.
2. The only important change brought about by the Finance Act, 1986, insofar as in its applicability in the case of tax deduction at source from payments of “Interest on Government securities” is the deletion of all references to surcharge. The basic rates of income-tax as communicated in the aforesaid circular remain unchanged in its application during the financial year 1986-87. It is, therefore, requested that a circular on the basis of the draft already supplied to you along with this Department’s Circular No. 427, dated 31-7-1985 may please be issued to all Treasury Officers and Sub-Treasury Officers under your control individually after deleting all references to surcharge made therein and also after making necessary corrections in respect of the year wherever applicable.
Circular : No. 460 [F. No. 275/68/86-IT(B)], dated 3-7-1986.
1718. Deduction of tax at source computed on the basis of circular of 1-6-1987 to be increased by a surcharge at the rate of 5 per cent – Effective from 16-12-1987
1. I am directed to invite a reference to this Department’s Circular No. 486 [F. No. 275/41/87-IT(B)], dated 1-6-1987 wherein the rates of tax applicable for making deduction of income-tax at source from the payment of interest on Government securities for the financial year 1987-88 were intimated to you.
2. It is brought to your notice that by section 3 of the Finance (Amendment) Act, 1987, the First Schedule to the Finance Act, 1987 has been amended. According to this amendment the amount of income-tax computed on the basis of the aforesaid Circulars shall be increased by a surcharge for the purpose of the Union calculated at the rate of 5 per cent of such income tax. The levy of surcharge comes into force with effect from 16-12-1987.
Circular : No. 506, dated 22-2-1988.