69Interest on securities.
70193. The person responsible for paying 71[to a resident] any income 72[by way of interest on securities] shall, 73[at the time of credit of such income to the
account of the payee or at the time of payment thereof in cash or by issue of a
cheque or draft or by any other mode, whichever is earlier], deduct income-tax 74[***] at the rates in force on the amount of
the interest payable :
75[***]
76[Provided 77[***] that no tax shall be deducted from—
(i) any interest payable on 4¼ per cent National
Defence Bonds, 1972, where the bonds are held by an individual, not being a
non-resident; or
78[(ia) any interest payable
to an individual on 4¼ per cent National Defence Loan, 1968, or 4¾ per cent
National Defence Loan, 1972; or]
79[(ib) any interest payable
on National Development Bonds; or]
(ii) 80[***]
81[(iia) any
interest payable on 7-Year National Savings Certificates (IV Issue); or]
82[(iib) any
interest payable on such debentures, issued by any institution or authority, or
any public sector company, or any co-operative society (including a
co-operative land mortgage bank or a co-operative land development bank), as
the Central Government may, by notification83 in the Official Gazette, specify in this behalf;]
84[***]]
(iii) any interest payable on 6½ per cent Gold
Bonds, 1977, or 7 per cent Gold Bonds, 1980, where the Bonds are held by an
individual not being a non-resident, and the holder thereof makes a declaration
in writing before the person responsible for paying the interest that the total
nominal value of the 6½ per cent Gold Bonds, 1977, or, as the case may be, the
7 per cent Gold Bonds, 1980, held by him (including such bonds, if any, held on
his behalf by any other person) did not in either case exceed ten thousand
rupees at any time during the period to which the interest relates;
(iiia) 85[* * *]
86[(iv) any interest payable
on any security of the Central Government or a State Government:]
87[Provided that nothing contained in this clause shall apply to
the interest exceeding rupees ten thousand payable on 8% Savings (Taxable)
Bonds, 2003 during the financial year;]
88[(v) any interest payable
to an individual, who is resident in India, on debentures issued by a company
in which the public are substantially interested, being debentures listed on a
recognised stock exchange in India in accordance with the Securities Contracts
(Regulation) Act, 1956 (42 of 1956), and any rules made thereunder, if—
(a) the interest is paid by the company by an
account payee cheque; and
(b) the amount of such interest or, as the case
may be, the aggregate of the amounts of such interest paid or likely to be paid
during the financial year by the company to such individual does not exceed 89[two thousand and five hundred rupees];]
90[(vi) any interest
payable to the Life Insurance Corporation of India established under the Life
Insurance Corporation Act, 1956 (31 of 1956), in respect of any
securities owned by it or in which it has full beneficial interest; or
(vii)
any interest payable to the General
Insurance Corporation of India (hereafter in this clause referred to as the
Corporation) or to any of the four companies (hereafter in this clause referred
to as such company), formed by virtue of the schemes framed under sub-section
(1) of section 16 of the General Insurance Business (Nationalisation) Act, 1972
(57 of 1972), in respect of any securities owned by the Corporation or such
company or in which the Corporation or such company has full beneficial
interest; or
(viii)
any interest payable to any other
insurer in respect of any securities owned by it or in which it has full
beneficial interest;]
91[(ix) any
interest payable on any security issued by a company, where such security is in
dematerialised form and is listed on a recognised stock exchange in India in
accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956)
and the rules made thereunder.]
92[Explanation 93[***].—For the purposes of this section, where any income by way of
interest on securities 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 crediting shall be deemed
to be credit of such income to the account of the payee and the provisions of
this section shall apply accordingly.]
Explanation 2.—94[Omitted by the Finance Act, 1992, w.e.f. 1-6-1992.]