TDS on Income by Way on Interest on Certain Bonds & Govt Securities

Government of Security: A security created and issued for the purpose of raising a public loan and having one of the forms specified in the section 2 of clause 2 of Public Debt Act, 1944.

Who is responsible to deduct TDS: Any person who is responsible for paying to a person being a Foreign Institutional Investor or a Qualified Foreign Investor.

Threshold Limit: Nil.

TDS Rates on Income by way of interest on certain bonds & Govt. securities: The rates of TDS shall be 5%

When to Deduct TDS: The time to deduct TDS on certain bonds & Govt. Securities as follows:

a)    at the time of credit such sum to the account of the payee, or

b)    at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode,

Which is earlier,

Deposit TDS: The following provision should be kept in mind while depositing TDS on certain bonds and Govt. Secruities.

Where tax is deducted by the office of the Government:

a)    On the same day where the tax is paid without production of an income-tax challan; and

b)    On or before seven days from the end of the month in which the deduction is made, where tax is paid accompanied by an income-tax challan.

In any other case,

a)    On or before 30^th day of April, where the income or amount is credited or paid in the month of March; and

b)    In any other case, on or before seven days from the end of the month in which the deduction is made.

Time limit for issue of certificate of TDS and Form: Form 16A within 15 days from the due date for furnishing the statement of tax deducted at source under rule 31A. In other words certificate of TDS in Form 16A is to be issued quarterly on or before 30^th July, 30^th October, 30^th January and 30^th May. However, in case of a deductor being office of the Government, certificate shall be issued quarterly on or before 15^th August, 15^th November, 15^th February and 30^th May.

TDS Returns/Statements: In Form No. 27Q on or before 15^th July, 15^th October and 15^th January for the first three quarters and on or before 15^th May for the last quarter. However, in case of a deductor, being office of the Government, the due date shall be on or before 31^st July, 31^st October and 31^st January for the first three quarters and on or before 15^th May for the last quarter.

Annual tax statement under section 203AA: In Form No. 26AS to be prepared and delivered by the Principal Director General or Director General of Income Tax (Systems) or a person authorized by him to the deductee by 31^st July following the financial year during which taxes were deducted or paid.