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Centre Relaxes Provisions Of TDS Under Income-tax Act

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, the official statement said.

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The Union Government, on Friday, said that it has relaxed the provisions of Income-Tax Act, 1961 Act in relation to the payment of interest in regard to Tax Deducted at Source (TDS) by Scheduled Bank to a member of Scheduled Tribe (ST) community. 

The Finance Ministry in an official notice said, "The Central Government in the exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act, 1961(“the Act”) 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."

"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 evidence in support of the same," the ministry added in a statement.  

The payment made or aggregate of payments made during the previous year does not exceed twenty lakh rupees.  ‘Scheduled Bank’ means a bank included in the Second Schedule of the Reserve Bank of India Act,1934, it said. 

(With PIB inputs)

 



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central government tds Income-Tax Act finance ministry