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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

Team SoOLEGAL 22 Sep 2021 3:23pm

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

In exercise of the powers conferred by sub-section(1F) of section 197A of the Income-tax Act, 1961 (hereinafter the "Act"), the Central Government notified that no tax shall be deducted 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 section 10(26) of the Act, subject to the following conditions:

1.     The payer satisfies that the receiver is a member of a Scheduled Tribe residing in any specified area and that the payment referred to above accrued or arose 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 pieces of evidence in support of the same.

2.     The aforesaid payment is reported by the payer in the tax deduction statements referred to in subsection (3) of Section 200 of the Act.

3.     The payment or aggregate of payments made over the preceding year does not exceed Rs. 20 lakh.

For the aforementioned notification, a ‘Scheduled Bank' is defined as a bank included in the Second Schedule of the Reserve Bank of India Act, 1934.

The notification no. 110/2021, dated September 17th, 2021, has been issued. It can be accessed at www.incometaxindia.gov.in and www.egazette.nic.in.



Tagged: Income tax Act   Scheduled Tribe   Scheduled Bank   Reserve Bank of India Act   Central Government  
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