Section |
194LD |
Particulars |
Income by way of interest on certain bonds and Government securities |
Type of business |
Individual |
Introduction to Section 194LD of Income Tax Act
Section 194LD of the Income Tax Act, 1961, discusses TDS deductions on interest from investments in Rupee Denominated Bonds of Indian companies or Government Securities made by Foreign Institutional Investors or Qualified Foreign Investors.
TDS will be deducted for the following beneficiaries:
The TDS rate is 5%, plus Surcharge or Health and Education Cess. If PAN isn't provided, the rate under Section 206AA is 20%.
If the tax return isn't filed for the specified period, the rate under Section 206AB applies, except for non-residents without a Permanent Establishment (PE) in India.
If both Section 206AA and Section 206AB apply, the higher rate is used.
According to Section 194LD, tax should be deducted at the time of income payment or credit, whichever comes first.