Section 194A ITA 1961 mandates TDS on INTEREST income other than securities at the rate of:
Answer & Solution
Correct answer: C.
1. Section 194A Income Tax Act 1961: TDS on INTEREST OTHER THAN INTEREST ON SECURITIES.
2. APPLICABLE TO: payments to RESIDENTS — interest on deposits, recurring deposits, debentures, loans, etc.
3. RATE: 10% (no surcharge or cess) plus increase in rate for specified persons.
4. THRESHOLD:
5. (a) BANKS (Scheduled banks): Rs 40,000 in financial year (Rs 50,000 for senior citizens 60+);
6. (b) Cooperative society engaged in banking business / post office deposits: same threshold;
7. (c) OTHERS (private parties, etc.): Rs 5,000 in a financial year.
8. Section 194A applies only to RESIDENT recipients; non-residents covered by Section 195.
9. Hence option B is correct.
_Source: CS Executive Paper 4 Tax Laws (ICSI BoS) + Income Tax Act 1961 + CGST Act 2017 — Income Tax Act 1961, Section 194A_
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