Is there any provision for tax to be deducted at source for interest paid in respect of Government securities?
As per clause (iv) of Section 193 of the Income tax Act, 1961, no tax shall be deducted from any interest payable on any security of the Central Government or a State Government effective from June 1, 1997. However, as per Finance Act, 2007 and Government of India Notification No. F.4(10)-W&M/2003 dated May 31, 2007, tax has to be deducted at source on the interest exceeding Rupees ten thousand payable during the financial year on 8% Savings (Taxable) Bonds, 2003 w.e.f. June 1, 2007.
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