Income Tax Act, 1961
Section 6: Ins. by s. 68, ibid (w.e.f. 12016).
6. Ins. by s. 68, ibid (w.e.f. 12016).
653
1[194LD. Income by way of interest on certain bonds and Government securities.—(1) Any
person who is responsible for paying to a person being a Foreign Institutional Investor or a Qualified
Foreign Investor, any income by way of interest referred to in sub-section (2), shall, at the time of credit
of such income to the account of the payee or at the time of payment of such income 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
rate of five per cent.
(2) The income by way of interest referred to in sub-section (1) shall be the interest payable on or
after the 1st day of June, 2013 but before the 2[1st day of July, 2020] in respect of investment made by the
payee in—
(i) a rupee denominated bond of an Indian company ; or
(ii) a Government security:
Provided that the rate of interest in respect of bond referred to in clause (i) shall not exceed the rate as
may be notified by the Central Government in this behalf.
Explanation.—For the purpose of this section,—
(a)“Foreign Institutional Investor” shall have the meaning assigned to it in clause (a) of
the Explanation to section 115AD;
(b)“Government security” shall have the meaning assigned to it in clause (b) of section 2 of the
Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(c)“Qualified Foreign Investor” shall have the meaning assigned to it in the Circular No.
Cir/IMD/DF/14/2011, dated the 9th August, 2011, as amended from time to time, issued by the
Securities and Exchange Board of India, under section 11 of the Securities and Exchange Board of
India Act, 1992 (15 of 1992).]
195. Other sums.—3[(1) Any person responsible for paying to a non-resident, not being a company,
or to a foreign company, 4[any interest (not being interest referred to in section 194LB or section
194LC)]5[or section 194LD] 6*** or any other sum chargeable under the provisions of this Act (not being
income chargeable under the head “Salaries” 7***) 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:
8[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:]
Any
person who is responsible for paying to a person being a Foreign Institutional Investor or a Qualified
Foreign Investor, any income by way of interest referred to in sub-section
The income by way of interest referred to in sub-section
shall be the interest payable on or
after the 1st day of June, 2013 but before the 2[1st day of July, 2020] in respect of investment made by the
payee in—
a rupee denominated bond of an Indian company ; or
a Government security:
Provided that the rate of interest in respect of bond referred to in clause
shall not exceed the rate as
may be notified by the Central Government in this behalf.
Explanation.—For the purpose of this section,—
of
the Explanation to section 115AD;
of section 2 of the
Securities Contracts
Act, 1956 (42 of 1956);
Any person responsible for paying to a non-resident, not being a company,
or to a foreign company, 4[any interest (not being interest referred to in section 194LB or section
194LC)]5[or section 194LD] 6*** or any other sum chargeable under the provisions of this Act (not being
income chargeable under the head “Salaries” 7***) 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:
8[Provided that in the case of interest payable by the Government or a public sector bank within the
meaning of clause
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:]