Income Tax

NO TDS u/s 194A to Scheduled Tribes by scheduled banks located in in NE States & Ladakh Region

No TDS u/s 194A on interest payments up to Rs. 20 lakhs to Scheduled Tribes by scheduled banks located in a specified area in North Eastern States and Ladakh Region

Sub-section (1F) of section 197A of the Income-tax Act, 1961 provides that no deduction of tax shall be made, or deduction of tax shall be made at such lower rate, from such payment to such person or class of persons, including institution, association or body or class of institutions, associations or bodies, as may be notified.

Accordingly, the members of Scheduled Tribes in NE States and Ladakh have been notified to which payment of interest can be made by the scheduled banks located in a specified area without deduction of TDS subject to the following conditions:

(i) 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 clause (26) of section 10 of the said Act, during the previous year relevant for the assessment year in which the payment is made, by obtaining necessary documentary evidences in support of the same;

(ii) the payer reports the above payment in the statements of deduction of tax as referred to in sub-section (3) of section 200 of the said Act;

(iii) the payment made or aggregate of payments made during the previous year does not exceed twenty lakh rupees.

Download CBDT Notification No. 110/2021 Click Here >>

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