Section 193: TDS on Interest on Securities

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Divya Singhvi

Form 16A
Form 26Q
Section 193
TDS Sections
Last updated on May 22nd, 2023

What is Section 193?

TDS on interest on securities is deducted under section 193 of the Income Tax Act. It requires to deduct TDS on interest on securities @ 10%. Let us first understand the meaning of it. Interest on securities means the interest on:

TDS Calculator
Tax Deducted at Source (TDS) is a part of Income Tax. TDS should be deducted by a person for specific payments made.
TDS Calculator
Tax Deducted at Source (TDS) is a part of Income Tax. TDS should be deducted by a person for specific payments made.

Who shall deduct TDS under section 193?

The person who is responsible for paying interest on securities to a resident shall deduct the tax component from the interest amount at the time of payment or credit to the account of the payee/deductee/receiver whichever is earlier.
TDS mechanism covers Payments made to non-residents. However, tax in such a case is to be deducted as per section 195. Further provisions of section 193 of the Income Tax Act are not applicable to the non-resident.

Rate of TDS under Section 193

The payer shall deduct tax at the rate of 10% from the sum of interest. However, if the payee does not furnish his Permanent Account Number (PAN), then the payer has to deduct tax at the higher of the following:

Due Date to deposit TDS with Government

Particulars Time Limit to deposit TDS
If the amount is credited in the month of March On or before 30th April
If the amount is credited in a month other than March Within 7 days from the end of the month in which deduction is made.

Penalty on Late Remittance of TDS

Exemption under Section 193:

The following are exempt from TDS deduction u/s 193:

TDS Certificate

Deductors of tax shall issue a TDS certificate to the deductee in Form 16A for tax deducted at source other than salary. You can download a certificate from here. The due dates for receipt of TDS certificates are as below:

TDS for the Quarter Due-Date
April-June 15th August
July-September 15th November
October-December 15th February
January-March 15th June

TDS Return

The Deductor liable to deduct tax under section 193 of the Income Tax Act shall file quarterly returns in Form 26Q within the following due dates:

Quarter Due-Date
April to June 31st July
July to September 31st October
October to December 31st January
January to March 31st May
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Is it mandatory to file a TDS return by the deductor?

Yes, the government considers it mandatory for the deductors of tax to specify the details of TDS payments made to the government in the form of a return. In addition TDS returns must be filed on a quarterly basis.

What is the TDS rate if PAN is not available?

All transactions liable for TDS will have tax deductions at a higher rate of 20% if the Permanent Account Number (PAN) of the payees is not available.

Whether assessee liable to deduct TDS u/s 193 on the provision of interest in case the payee is not known?

In a case where a person who is to receive interest cannot be identified at a stage at which provision for ‘interest accrued but not due is made. In such case, there was no obligation upon the assessee to deduct tax at source. Therefore there could not be any question of levy of penalty and interest under section 201 upon the assessee.

Got Questions? Ask Away!

  1. Hey @Dia_malhotra

    As per section 194A, TDS on interest other than interest on securities is required to be deducted by any person other than Individual or HUF at the rate of 10%, when paid to a resident. No surcharge, education cess or SHEC shall be added to the above rate.

    Hope this helps!

  2. Hey @HarishMehta

    TDS u/s 194J needs to be deducted by deductor other than an individual or a HUF, @ 10% on any amount paid or payable to any which is in excess of INR 30,000 as:

    1. Fees for professional services
    2. Fees for technical services
    3. Any remuneration or fees or commission by whatever name called paid to a director ( other than salary)
    4. Royalty
    5. Any sum referred to in clause (VA) of section 28.

    Hope this helps!

  3. Hello @the_AK,

    Against gross income, you can claim business expenses that you have incurred for earning that income. So you can claim this service fee as a business expense from the gross income received by you.

    Hope this helps!

  4. Hello @Anuj_Agarwal,

    TDS will be deducted by the company when the interest is actually paid on the securities, so at that time whoever is the owner of such security shall receive the interest and can claim credit of interest.

    Hope this helps!

  5. I have respectable salary income and 1000 insurance commission…ie old commission…not claiming any expenses…can i show it as other income in itr1 or have to file itr 3

  6. Hi @Shivam_B

    If you have income from salary and income from insurance commission (business income), then you will be required to file ITR 3.

  7. Itr 3 is so big…have to pay heavy charges…for filing…will it be defective if i do so ie reporting 1000 as other income in itr1 along with salary income…have closed down the insirance work since yesrs…i even contacted commssiom giving broker and closed my commission account…still they are showing in 26as wheress i am not receiving in real

  8. Hi @Shivam_B

    As per the recent utilities, ITD gives you the option to select only the schedules applicable to you while filing ITR.
    Thus, you are not required to go through the entire ITR 3 form. You can also prepare and file ITR on Quicko, where you can upload form 16 and add commission income under the head “Business & Profession” and file ITR 3, without any charges as Quicko is a DIY platform helping individuals to file taxes.

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