We are a trust and have obtained 15 G for No deduction of TDS u/s 197A of Income Tax Act, 1961. But the bankers have not accepted the same and deducted TDS u/s 194A of the Trust.
Section 197A(1A) states that 15G can be obtained by a person (not being a company or a firm), if such person furnishes to the person responsible for paying any income in the nature referred to in section 194A or section 194K…
Section 2 (31) defines person as:
- an individual,
- a Hindu undivided family,
- a company,
- a firm,
- an association of persons or a body of individuals, whether incorporated or not,
- a local authority, and
- every artificial juridical person, not falling within any of the preceding sub-clauses.
Therefore Section 197A includes all above mentioned persons except specific exclusion made of company and firm.
Also section 10(23C) of Income Tax Act prescribes certain guidelines. The trust has complied with Section 11, 12 and 13 as well. The condition of applying 85% of the income derived is a matter concern of Assessing Officer to verify. The same is also certified in Form 15G. The banker is in no way empowered to verify the compliance of provisions of above sections.
Considering the above facts and details , we seek your views whether the Banker is correct in denying 15G and deducting TDS of Trust.
CAclubindia
