TDS provisions are not applicable on Corporate Bonds issued in dematerialised form and listed on a recognised stock exchange

Section 193 of the Income-tax Act provides for deduction of tax at source (TDS) on any income by way of interest on securities payable to a resident. In order to facilitate development of the corporate bond market for improving the availability of finances for infrastructure development, the TDS on any interest payable to a resident on any security issued by a company has now been withdrawn, where such security is in dematerialised form and is listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956). 

Applicability: This amendment has been made applicable with effect from 1st June, 2008.