small query

Interest on securities is due on its due date...some people transfer the securities just before due date to avoid taxes on the interest income...

Bond washing transaction-as per sec 94(1) ,in case any person transfers the securities just before due date and buys the same securities after the due date of interest then the income i.e interest on the security will be taxed in the hands of transferor and not the transferee...but this can be avoided if the transferor proves before the A.O that this was unintensional and not with the intension to avoid tax.

First let me thank u..

My doubt is. Interest on securities is attracted by TDS @ 10%...

How the assessee can evade the tax???

which assesse are u talking abt??transferor or transferee?

can u explain me by assuming both transferee and transferor...

the transferor has already transfered the securities before receiving interest so his income is not increased...no question of TDS here......

and the transferee in case his income is below exemption limit can get his TDS already deducted refunded later or can take help of form 13 by applying to the A.O...

this is the tax plainning and to avoid this bond washing transaction this section was introduced...

Ok... thanks a lot...  NOw i understood wholly....  thanks once again....