TDS on 7.75% GOI Savings (Taxable) Bonds, 2018
The government of India introduced 8% Savings (Taxable) Bonds, 2003 in 2003. Under the existing law, the interest received by the investor is taxable. Further, the payer is liable to deduct tax at source under section 193 of the Act at the time of payment or credit of such interest in excess of rupees ten thousand to a resident on TDS on 7.75% GOI Savings.
The government has now decided to discontinue the existing 8% Savings (Taxable) Bonds, 2003 with a new 7.75% GOI Savings (Taxable) Bonds, 2018. The interest received under the new bonds will continue to be taxed as in the case of the earlier once.
The provisions of section 193 are proposed to be amended to allow for a deduction of tax at source at the time of making payment of interest on such bonds to residents. However, no TDS will be deducted if the amount of interest is less than or equal to ten thousand rupees during the financial year.
This amendment will take effect from 1st April 2018.
Extract of Clause 46 of Finance Bill 2018
Clause 46 of the Bill seeks to amend section 193 of the Income-tax Act relating to interest on securities.
It is proposed to amend the proviso to clause (iv) of the said section to provide that the person responsible for paying to a resident any interest on 7.75% Savings (Taxable) Bonds, 2018 shall deduct income-tax, if the interest payable on such bonds exceeds ten thousand rupees during the financial year.
This amendment will take effect from 1st April 2018.
[Clause 46]
