No TDS u/s 194A on Interest Payment to a member of Scheduled Tribe of Specified Areas u/s 10(26)

CBDT notifies that no TDS u/s 194A is to be deducted by banks in respect of payment of interest of upto Rs. 20 lacs in a previous year, made to a member of Scheduled Tribe residing in areas specified in Section 10(26) of the Income Tax Act, 1961.

CBDT Press Release dt. 17/09/2021: No TDS u/s 194A on Interest Payment to a member of Scheduled Tribe of Specified Areas u/s 10(26)

Central Government relaxes provisions of TDS u/s 194A of the Income-tax Act, 1961 in view of section of 10(26) of the Act

The Central Government in exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act, 1961 (“the Act”) has notified that no deduction of tax shall be made on the following payment under section 194A of the Act, namely payment in the nature of interest, other than interest on securities, made by a Scheduled Bank (hereinafter the ‘payer’) located in a specified area to a member of Scheduled Tribe (hereinafter the ‘receiver’) residing in any specified area as referred to in S. 10(26) of the Act, subject to the following conditions:

i) the payer satisfies itself that the receiver is a member of Scheduled Tribe residing in any specified area, and the payment as referred above is accruing or arising to the receiver as referred to in section 10(26) of the Act, during the previous year relevant for the assessment year in which the payment is made, by obtaining necessary documentary evidences in support of the same;

ii) the payer reports the above payment in the statements of deduction of tax as referred to in sub-section (3) of section 200 of the Act;

iii) the payment made or aggregate of payments made during the previous year does not exceed twenty lakh rupees.

For the purposes of the said notification, ‘Scheduled Bank’ means a bank included in the Second Schedule of the Reserve Bank of India Act, 1934.

Notification No. 110/2021 dated 17/09/2021 has been issued. It is available on www.incometaxindia.gov.in and also on www.egazette.nic.in

CBDT Income Tax Notification 110/2021 dt. 17/09/2021: No TDS u/s 194A on Interest Payment to a member of Scheduled Tribe of Specified Area u/s 10(26)

S.O. 3815(E).- In exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that no deduction of tax shall be made on the following payment under section 194A of the said Act, namely payment in the nature of interest, other than interest on securities, made by a scheduled bank (hereinafter the “payer”) located in a specified area, to a member of Scheduled Tribe (hereinafter the “receiver”) residing in any specified area, as referred to in clause (26) of section 10 of the said Act, subject to the following conditions:

(i) the payer satisfies itself that the receiver is a member of Scheduled Tribe residing in any specified area, and the payment as referred above is accruing or arising to the receiver as referred to in clause (26) of section 10 of the said Act, during the previous year relevant for the assessment year in which the payment is made, by obtaining necessary documentary evidences in support of the same;

(ii) the payer reports the above payment in the statements of deduction of tax as referred to in subsection (3) of section 200 of the said Act;

(iii) the payment made or aggregate of payments made during the previous year does not exceed twenty lakh rupees.

Explanation.- For the purposes of this notification, the expression “scheduled bank” shall have the
same meaning as assigned to it in clause (e) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934).

2. This notification shall come into force from the date of its publication in the Official Gazette.

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