Financial Daily from THE HINDU group of publications
Wednesday, Jul 17, 2002
Financial Daily from THE HINDU group of publications Wednesday, Jul 17, 2002 |
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Industry & Economy
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Taxation TDS exemption for 14 entities Our Bureau
NEW DELHI, July 16 THE Central Board of Direct Taxes (CBDT) has exempted income received by 14 entities - which enjoy the benefit of unconditional tax exemption and are not mandatorily required to file returns - from the requirement of tax deduction at source (TDS). These entities include, among others, any fund set up by LIC of India on or after August 1, 1996 or by any other insurer, the Insurance Development Regulatory Authority ), Provident Fund - recognised provident fund, superannuation fund, approved gratutity fund and Employees' State Insurance Fund. Khadi and Village Industries Board, SAARC Fund for regional projects set up by Columbo declaration, Prime Minister's National Relief Fund, Corporations and Boards will also be exempt from the TDS requirement. The clarification issued by the CBDT comes in the wake of amendments made in this year's Budget to Section 197 A of the Income Tax Act. In the earlier dispensation, no tax was deducted at source if the assessee furnished a self-declaration that his tax liability - on total income including dividends, payments on deposits under the National Savings Schemes, interest on securities etc - was nil. However, this provision has been amended now to stipulate that self-declaration by the assessee will not be permitted if the aggregate income (from interest on securities and dividends on NSS deposits) exceeds Rs 50,000 per annum. Entities whose income is unconditionally exempt from tax (under Section 10 of the IT Act) and who are statutorily not required to file returns had made representations to the CBDT seeking a clarification whether self declaration can be submitted by these entities on payments made to them beyond the threshold limit. CBDT has now clarified that there would not be requirement of TDS for these entities since their income is any way exempt from tax.
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