September 2008
Certain clarifications have been issued by RBI to all the banks in connection with TDS on 8% Savings (Taxable) Bonds, 2003 : RBI/2008-2009/121 — Ref. DGBA.CDD. No. H — 1311/13.01.299/2008-09, dated 5-8-2008.
By Pinky Shah, Sonalee Godbole, Gaurang Gandhi, Chartered Accountants
Reading Time 2 mins
fiogf49gjkf0d
New Page 1
Part A : DIRECT TAXES
66 Certain clarifications have been issued
by RBI to all the banks in connection with TDS on 8% Savings (Taxable) Bonds,
2003 : RBI/2008-2009/121 — Ref. DGBA.CDD. No. H — 1311/13.01.299/2008-09, dated
5-8-2008.
While referring to the earlier Circular issued by RBI —
DGBA.CDD No. H-3024/13.01.299/2007-08, dated September 19, 2007, RBI has issued
further clarifications on deduction of tax at source on the subject matter based
on clarifications received from the CBDT. The important clarifications in this
matter are as under :
- The date from which TDS needs to be deducted is 1-6-2007. Accordingly,
irrespective of the date of investment, if interest is credited to the account
of any investor after 1-6-2007, TDS needs to be deducted.
- Forms 15H and 15G (exemption from TDS) need to be accepted if the conditions
mentioned for the said forms are satisfied.
- In case of cumulative schemes of investment of bonds, TDS would be deducted as
and when the interest is credited, irrespective of the fact that the payment
is made at the end of the tenure of the bonds.
- Lower deduction/NIL deduction certificate from the tax authorities is required
in case of charitable institutions, for exemption from deduction of tax at
source from interest eligible by such institutions.
