1064. Deduction of tax at source, as per the rate specified in Part II of First Schedule to Finance Act, 1987, to be increased by a surcharge at the rate of 5 per cent – Effective from 16-12-1987
I am directed to say that the rates at which tax is to be deducted at source under section 194A by persons who are responsible for paying to a resident any income by way of interest other than income chargeable under the head “Interest on securities” are given in Part II of the First Schedule to the Finance Act, 1987. The exempted categories from which such deduction will not be made are given in the said section. It is brought to your notice that vide section 3 of the Finance (Amendment) Act, 1987, the First Schedule to the Finance Act has been amended with immediate effect. According to this amendment, the amount of income-tax computed on the basis of the rates laid down in the Finance Act shall be increased by a surcharge for purposes of the Union calculated at the rate of 5 per cent of such income-tax. The levy of surcharge has come into force with effect from 16-12-1987.
Circular: No. 510 [F. No. 275/25/88-IT(B)], dated 23-2-1988.