Section 194A (3) (ix) of the Income Tax Act 1961 provides for deduction of tax at source only if the interest income of the claimant paid or credited during the financial year on compensation granted by Motor Accident Claims Tribunal exceeds Rs.50,000/-. The question is whether the interest paid or credited during financial year means interest accrued till the date of payment or is it required to be bifurcated as per year of accrual for each claimant. Say e.g. Claim filed in 2005 is allowed in 2015 with interest. Whether the TDS provisions would apply for aggregate interest from 2005 till 2015 exceeding Rs.50,000/- per claimant or the interest per year has to exceed Rs.50,000/- for deductibility under said provisions?? There are conflicting judgments of ITAT as well as various High Courts and unfortunately no authoritative pronouncement of Apex Court is found. Can anybody throw light on the subject??
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