Interest other than “Interest on securities”
21 194A. 22 (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income 23 [by way of interest on securities], shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash on by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force.
24 [***]
25 [Explanation.—For the purposes of this section, where any income by way of interest as aforesaid is credited to any account, whether called "Interest payable account" or "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such credit shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.]
(3) The provision of sub-section (1) shall not apply—
27 [(i) where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the person referred to in sub-section (1) to the account of, or to, the payee, does not exceed 28 [two thousand five hundred rupees;]
( ii) to such income credited or paid before the 1st day of October, 1967;
( iii) to such income credited or paid to—
( a) any banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies, or any co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank), or
( b) any financial corporation established by or under a Central, State or Provincial Act, or
( c) the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), or
( d) the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), or
( e) any company or co-operative society carrying on the business of insurance, or
( f) such other institution, association or body 29 [or class of institutions, associations or bodies] which the Central Government may, for reasons to be recorded in writing, notify 30 in this behalf in the Official Gazette;
( v) to such income credited or paid by a co-operative society 32 [to a member thereof or] to any other co-operative society;]
33 [(vi)to such income credited or paid in respect of deposits under any scheme framed by the Central Government and notified 34 by it in this behalf in the Official Gazette;
35 [(vii) to such income credited or paid in respect of deposits with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act), or with a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank);]
36-37 [(viii) to such income credited or paid by the Central Government under any provision of this Act or the Indian Income-tax Act, 1922 (11 of 1922), or the Estate Duty Act, 1953 (34 of 1953), or the Wealth-tax Act, 1957 (27 of 1957), or the Gift-tax Act, 1958 (18 of 1958), or the Super Profits Tax Act, 1963 (14 of 1963), or the Companies (Profits) Surtax Act, 1964 (7 of 1964), or the Interest-tax Act, 1974 (45 of 1974).]
38 [(4) The person responsible for making the payment referred to in sub-section (1) may, at the time of making any deduction, increase or reduce the amount to be deducted under this section for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct during the financial year.]