The Ministry of Finance has modified rules of the Income-tax Act, 1961 relating to tax deducted at source (TDS) on interest payments made by a scheduled bank to a resident of a scheduled tribe (ST), according to an order issued on September 17, 2021 by the Central Government of India. According to the statement, the central government has said that "no deduction of tax shall be made on the following payment under section 194A of the Act, namely payment in the nature of interest, other than interest on securities, made by a Scheduled Bank (hereinafter the 'payer') located in a specified area to a member of Scheduled Tribe (hereinafter the 'receiver') residing in any specified area as referred to in s.10(26) of the Act."
Scheduled banks now have to be sure that the member of the Scheduled Tribe resident in the designated region is a member of the Scheduled Tribe, "and the payment as referred above is accruing or arising to the receiver as referred to in section 10(26) of the Act, during the previous year relevant for the assessment year in which the payment is made, by obtaining necessary documentary evidences in support of the same," according to the order.
According to the official rules of the Income-tax Act, the scheduled bank will be required to disclose the above said payment in the statements of deduction of tax as referred to in sub-section (3) of section 200 of the Act. The payment made or aggregate of payments made during the previous year does not exceed Rs 20 lakhs.
For the purposes of the said notification, 'Scheduled Bank' means a bank included in the Second Schedule of the Reserve Bank of India Act, 1934, CBDT said in the statement.
The Finance Ministry also extended the deadline for linking Aadhaar to the Permanent Account Number (PAN) by six months to March 31, 2022. The deadline for finishing penalty procedures has also been extended by six months, until March 31, 2022. For detailed details, please click here.