Home >News >India >Income tax: Finance Ministry relaxes TDS provisions for ST community
Listen to this article

Finance Ministry has relaxed provisions of Income-tax Act, 1961 related to tax deducted at source (TDS) on payment of interest by a scheduled bank to a member of a scheduled tribe (ST) community. The order comes into effect from Friday.

In a notification on Friday, the ministry said that “no deduction of tax shall be made on the following payment under section 194A of the said Act, namely payment in the nature of interest, other than interest on securities, made by a scheduled bank located in a specified area, to a member of Scheduled Tribe residing in any specified area, as referred to in clause (26) of section 10 of the said Act."

The Section 194A of Income-tax Act deals with the provisions relating to TDS on interest other than on securities. Tax is to be deducted under section 194A, if interest (other than interest on securities) is paid to a resident. Thus, the provisions of section 194A are not applicable in case of payment of interest to a non-resident.

The order said banks will have to be confirm that the receiver of the payment belongs to the ST community, “and the payment as referred above is accruing or arising to the receiver as referred to in clause (26) of section 10 of the said Act, during the previous year relevant for the assessment year in which the payment is made."

The bank will have to report such payment in the statements of deduction of tax, in accordance to the relevant provisions of the Income-tax Act. The payment made or aggregate of payments made during the previous year should be 20 lakh or less.

In a separate order, the Finance Ministry extended the deadline for linking Aadhaar with Permanent Account Number (PAN) by six months to March 31, 2022. The time limit for this was scheduled to end on September 30, 2021. The due date for completion of penalty proceedings has also been extended by six months to March 31, 2022.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Edit Profile
My ReadsRedeem a Gift CardLogout