MANAGEMENT

Detailed explanation-1: -As per section 193 read with Part II of First Schedule of Finance Act, tax is to be deducted 10% from the amount of interest. No surcharge, education cess or SHEC shall be added to the above rates. Hence, tax will be deducted at source at the basic rate. at the rate of 20%.

Detailed explanation-2: -As per section 194A read with Part II of First Schedule to Finance Act, tax is to be deducted 10% from the amount of interest.

Detailed explanation-3: -Section 193 – TDS on interest on securities: A TDS of 10% is to be deducted for individual and HUF on interest from securities received if the limit of Rs. 5000 on debentures and 10, 000 on others are crossed.

Detailed explanation-4: -What is the rate of TDS under Section 194A? Rate of TDS is 10% when the PAN is provided by the payee. This rate was 7.5% for interest credited from 14th May, 2020 until 31st March, 2021 as a COVID-19 relief measure by the government.

Detailed explanation-5: -If the assessee maintains books of account on a cash basis, interest by way of interest on securities is taxable on receipt basis. If the books are being maintained on the mercantile system, it is taxable on due basis.