Scope for TDS on interest income u/s 194A widened to include co-operative societies
Section 194A of the Act provides for TDS on interest other than interest on securities. It provides that any person not being individual or HUF who is responsible for paying to a resident any income by way of interest other than income by way of interest on securities, shall deduct income-tax at the rates in force.
It also provides exceptions where the TDS shall not be applicable. Also, it the threshold for the amount of payment where TDS shall not be deducted.
In order to extend the scope of this section to interest paid by large co-operative society, it is proposed to provide that a co-operative society shall be liable to deduct income-tax under this section if-
(a) the total sales, gross receipts or turnover of the co-operative society exceeds fifty crore rupees during the financial year immediately preceding the financial year in which the interest referred to in sub-section (1) is credited or paid;
and
(b) the amount of interest, or the aggregate of the amount of such interest, credited or paid, or is likely to be credited or paid, during the financial year is more than fifty thousand rupees in case of payee being a senior citizen and forty thousand rupees, in any other case.
This amendment will take effect from 1st April, 2020.
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