The term ‘interest on securities’ is defined under section 2(28B) of the Income Tax Act, 1961 which means interest on securities of the Central or a State Government and interest on debentures / other securities issued by or on behalf of a local authority / a company / a co-operative society established by the Central or State or Provincial Act.
Section 193 of the Income Tax Act deals with the provisions of deduction of TDS on interest on securities, and the same has been explained in the present article.
As per provisions of Section 193, any person who is paying interest on securities to a resident is required to deduct TDS. Thus, the provisions of section 193 do not apply to the payment of interest on securities to a non-resident.
Rate of TDS on interest on Securities –
The Deductor is liable to deduct TDS @ 10%. However, if the payee fails to furnish his Permanent Account Number (PAN), then, in that case, the Deductor would be liable to deduct TDS at the maximum marginal rate.
The Time of deduction of TDS on interest on Securities –
The Deductor is required to deduct TDS earlier of the following event –
The time limit for deposit of TDS on interest on Securities –
The Deductor deducting TDS on interest on Securities, as per provisions of section 193 of the Income Tax Act, is required to deposit the deducted TDS within 7 days of the next month in which the TDS is deducted. Further, the TDS deducted for the month of March is to be deposited within 30th April.
Issuance of TDS certificate –
The Deductor deducting TDS as per section 193 of the Income Tax Act is required to issue TDS certificate in Form 16A within the following due dates –
1. April to June – 15th August
2. July to September – 15th November
3. October to December – 15th February
4. January to March – 15th June
TDS return filing –
The Deductor liable to deduct tax under section 193 of the Income Tax Act is required to file quarterly return in Form 26Q within the following due dates –
1. April to June – 31st July
2. July to September – 31st October
3. October to December – 31st January
4. January to March – 31st May
No TDS is to be deducted for interest payable on the following bonds / securities –
There is no exemption limit specified in case of TDS under section 193 except two following cases;
Question (FAQ) –
1. What is Section 193 of the Income Tax Act?
Section 193 of the Income Tax Act deals with the provisions of deduction of TDS on interest on securities.
2. Is TDS applicable on interest on debentures?
Yes, TDS is applicable on interest on debentures as per provisions of section 193 of the Income Tax Act.
3. What happens if TDS is not paid?
In case the TDS has been deducted but not paid, then, the Deductor would be liable to pay interest @ 1.5% per month from the date on which TDS was deducted till the date on which TDS was paid.
4. What is TDS rate on interest?
Section 193 of the Income Tax Act requires to deduct TDS on interest on securities @ 10%.
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|Section 194 – TDS on dividend|
|Section 194A: TDS on interest other than interest on securities|
|Section 194B and Section 194BB – TDS|
|Section 194C – TDS on Contractors|
|Section 194D – TDS on insurance commission|
|Section 194DA – TDS in respect of Life Insurance Policy|
|Section 194E – TDS on payment to Non-resident Sportsmen or Sports Association|
|TDS under Section 194EE and Section 194F|
|Section 194G TDS on Commission on Sale of Lottery Tickets|
|Section 194H – TDS on Commission or Brokerage|
|Section 194I of Income Tax Act, 1961 – TDS on Rent|
|Section 194IA TDS on transfer of immovable property|
|Section 194IB – TDS on Rent paid by Individual / HUF|
|Section 194LA: Payment of Compensation on acquisition of certain immovable property|
|TDS under Section 194LB, 194LBA, 194LBB and 194LBC|
|Section 194LC: TDS on income by way of interest from an Indian Company or a business trust|
|Section 194LD TDS on income by way of interest on certain bonds and Government Securities|
|Section 194J TDS on Fees for Professional or Technical Services|
|Section 194N – TDS on Cash Withdrawals|
|Section 194M: TDS on Payment of certain sum by certain Individual / HUF|
|Section 195 TDS on payment of any other sum to a non-resident|