Tds on interest on securities


Rachit (Analyst)     15 January 2013

Rachit
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Whether TDS is required to be deducted U/s. 193 on Interest paid on securities where the securities (Non-Convertible Debentures) are listed on stock exchange (BSE). At present the said securites are held by Mutual Funds only.

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M.com,CS,CA F Tushar Sampat (M.com CS,CA F)     15 January 2013

M.com,CS,CA F Tushar Sampat
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refer sec193 and check wther securiies fall in it or not.

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Rachit (Analyst)     15 January 2013

Rachit
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The debentures (securities) are issued by a company in which the public are substantially interested. All the said debenture are presently held by mutual funds only.

My query is more specifically in relation to Proviso (ix) to sec.193 exempting deduction of tax at source.

Proviso (ix) to sec. 193:

"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.]"

 

The above debentures are listed on BSE and are in dematerialised form. Further, these securites do not fall under any of the exempted securities mentioned under provisos to sec.193


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