Section 194EE TDS on Payments in respect of Deposit under National Savings Scheme (NSS)
1) Who is responsible to deduct tax u/s 194EE?
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 of Income Tax Act, 1961
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.