1) Who is responsible to deduct tax under section 194EE of Income Tax Act, 1961?
The person responsible for paying to any person any amount standing to the credit of such person under National Savings Scheme (to which section 80CCA was applicable) together with interest accrued thereon, shall deduct income-tax thereon on such amount at the time of its payment.
2) When to Deduct TDS under Section 194EE?
Tax is deductible at the time of payment.
3) Rate of TDS under Section 194EE
Rate of TDS under Section 194EE will be 10%(7.5% w.e.f. 14.05.2020 to 31.03.2021)
4) When No TDS is Deductible under Section 194EE?
In the following cases, Tax is Not Deductible :
1. PAYMENT UP TO ₹ 2,500 –
Where the amount of payment or the aggregate amount of payments in a financial year is less than ₹ 2,500, tax is not deductible under section 194EE.
2. PAYMENT TO LEGAL HEIRS –
Where the payment is made to the heirs of the deceased assessee (depositor), no tax shall be deducted at source.
3. DECLARATION TO THE PAYER IN FORM NO. 15G OR 15H [Section 197A]
If a declaration is submitted under section 197A by the recipient to the payer, then no tax is deductible in a few cases.
Extract of Section 194EE TDS on Payments in respect of Deposit under NSS
194EE. The person responsible for paying to any person any amount referred to in clause (a) of sub-section (2) of section 80CCA shall, at the time of payment thereof, deduct income-tax thereon at the rate of ten per cent :
Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to the payee during the financial year is less than two thousand five hundred rupees :
Provided further that nothing contained in this section shall apply to the payment of the said amount to the heirs of the assessee.
(Republished with amendments)
Read Also:-
Author Bio
We closed NSS ACCOUNT in OCT21.TOTAL AMOUNT PAID TO US IS SUPPOSE X where X= Y + Z (where INTEREST = Y + PRINCIPAL AMOUNT PAID BY US = Z) . While paying us net amount POST OFFICE deducted TDS on Z the principal amount also and accordingly fed data under 26 AS . They did not separate out Z while working out Z the principal paid by us. How to set the thing correct . Can it be done by CA while filing the return or we will have to get 26AS data got corrected by Post office only. 30%amount on principal Z works to around 12 thousand. Novino
Is there any maximum limit is fixed for withdrawal of money from NSS-87 scheme in a financial year?If so what’s that amount?