Other sums 1
Any person responsible for paying to a non- resident, not being a company, or to a foreign company, any interest not being interest on securities or any other sum chargeable under the provisions of this Act not being income chargeable under the head Salaries shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income- tax thereon at the rates in force 4 Provided that in the case of interest payable by the Government or a public sector bank within the meaning of clause 23D of section 10 or a public financial institution within the meaning of that clause, deduction of tax shall be made only at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode. Explanation.- For the purposes of this section, where any interest or other sum as aforesaid is credited to any account, whether called Interest Payable Account or Suspense Account or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.
Where the person responsible for paying any such sum chargeable under this Act other than interest on securities, and 2. Substituted by the Finance Act, 1987, w. e. f. 1- 6- 1987. Prior to the substitution, subsection 1 , as amended by the Finance Act, 1965, w. e. f. 1- 4- 1965 and the Finance Act, 1975, w. e. f. 1- 4- 1975, read as under 195. Other sums.- 1 Any person responsible for paying to a non- resident, not being a company, or to a company which is neither an Indian company nor a company which has made the prescribed arrangements for the declaration and payment of dividends within India any interest, not being Interest on securities, or any other sum, not being dividends, chargeable under the provisions of this Act, shall, at the time of payment unless he is himself liable to pay any income- tax thereon as an agent, deduct income- tax thereon at the rates in force Provided that nothing in this sub- section shall apply to any payment made in the course of transactions in respect of which a person responsible for the payments is deemed under the proviso to sub- section 1 of section 163 not to be an agent of the payee. 3. The words or dividends omitted by the Finance No. 2 Act, 1991, w. e. f. 1- 10- 1991 5. Inserted by the Direct Tax Laws Second Amendment Act, 1989, w. r. e. f. 1- 6- 1987. 6. The words or dividends omitted by the Finance Act, 1976, w e. f. 1- 6- 1976. 7. The words, dividend omitted by the Finance No. 2 Act, 1991, w. e. f. 1- 10- 1991 salary to a non- resident considers that the whole of such sum would not be income chargeable in the case of the recipient, he may make an application 1 to the Assessing Officer to determine, by general or special order, the appropriate proportion of such sum so chargeable, and upon such determination, tax shall be deducted under sub- section 1 only on that proportion of the sum which is so chargeable Omitted by the Finance No. 2 Act, 1991 , w. e. f. 1- 10- 1991
Subject to rules made under sub- section 5 , any person entitled to receive any interest or other sum on which income- tax has to be deducted under sub- section 1 may make an application in the prescribed form to the Assessing Officer for the grant of a certificate authorising him to receive such interest or other sum without deduction of tax under that subsection, and where any such certificate is granted, every person responsible for paying such interest or other sum to the person to whom such certificate is granted shall, so long as the certificate is in force, make payment of such interest or other sum without deducting tax thereon under sub- section 1 .
A certificate granted under sub- section 3 shall remain in force till the expiry of the period specified therein or, if it is cancelled by the Assessing Officer before the expiry of such period, till such cancellation.
The Board may, having regard to the convenience of assessees and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an 3 and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith.