tax deduction at source

Section 194A deals with the provisions relating to TDS on interest other than on securities. Tax is to be deducted @ 10% from the amount of interest under section 194A, when interest (other than interest on securities) is liable to be paid to a resident.

Refer: TDS under sec 194A

What is Section 194A?

Section 194A deals with deduction of TDS on interest other than on securities like Interest on Fixed Deposits, Interest on Loans and Advances other than banks.

This Section is only applicable to a resident. Thus, the provisions of section 194A are not applicable in case of payment of interest to a non-resident.

Payments made to non-residents are also covered under TDS mechanism. However, tax in such a case is to be deducted as per Section 195.


The rate of TDS shall be 10%.

No surcharge, education cess or SHEC shall be added to the above rates. Hence, tax will be deducted at source at the basic rate.

What is the rate of TDS?

10%, if PAN is furnished

20%, if no PAN is furnished

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