Finance Ministry has relaxed provisions of Income-tax Act, 1961 associated to tax deducted at supply (TDS) on cost of curiosity by a scheduled financial institution to a member of a scheduled tribe (ST) group. The order comes into impact from Friday.
In a notification on Friday, the ministry stated that “no deduction of tax shall be made on the next cost beneath part 194A of the stated Act, particularly cost within the nature of curiosity, apart from curiosity on securities, made by a scheduled financial institution situated in a specified space, to a member of Scheduled Tribe residing in any specified space, as referred to in clause (26) of part 10 of the stated Act.”
The Section 194A of Income-tax Act offers with the provisions regarding TDS on curiosity apart from on securities. Tax is to be deducted beneath part 194A, if curiosity (apart from curiosity on securities) is paid to a resident. Thus, the provisions of part 194A usually are not relevant in case of cost of curiosity to a non-resident.
The order stated banks must be verify that the receiver of the cost belongs to the ST group, “and the cost as referred above is accruing or arising to the receiver as referred to in clause (26) of part 10 of the stated Act, in the course of the earlier yr related for the evaluation yr wherein the cost is made.”
The financial institution must report such cost within the statements of deduction of tax, in accordance to the related provisions of the Income-tax Act. The cost made or combination of funds made in the course of the earlier yr must be ₹20 lakh or much less.
In a separate order, the Finance Ministry prolonged the deadline for linking Aadhaar with Permanent Account Number (PAN) by six months to March 31, 2022. The time restrict for this was scheduled to finish on September 30, 2021. The due date for completion of penalty proceedings has additionally been prolonged by six months to March 31, 2022.
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