Barring certain exception, tax has to be deducted at source on payment of interest on securities to residents.Who is liable to deduct TDS? Any assessee be it Individual, company, HUF , Partnership etc. For whom should TDS be deducted? From Resident assessee (individual, company, HUF etc) to whom interest is paid

1. Tax deducted at source (TDS) for interest on securities (debentures) - Section
193
Barring certain exception, tax has to be deducted at source on payment of interest on securities to residents.
Key Points - TDS on interest on securities
Who is liable to deduct TDS? Any assessee be it Individual, company, HUF , Partnership etc.
For whom should TDS be
deducted?
From Resident assessee (individual, company, HUF etc) to whom interest is
paid
At what rate should tax be
deducted?
For AY 2014-15 & AY 2015-16 TDS should be deducted @ 10%
When should TDS be deducted TDS should be deducted at the
 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 issue of a cheque or draft or by any other mode, whichever is
earlier
Interest on Securities Exempt from TDS provision u/s 193
In the below cases TDS on securities will be exempt from TDS u/s 193
1. Interest payable on 4 % National Defence Bonds, 1972 held by Resident Individual
2. Interest payable to an individual on 4 % National Defence Loan, 1968,
3. Interest payable to an individual on 4% National Defence Loan, 1972
4. Interest payable on National Development Bonds
5. Interest payable on 7-Year National Savings Certificates (IV Issue)
6. Interest payable on any security of the Central Government or a State Government:
7. If interest does not exceed 10,000 Rs.
a. Interest payable on 6% Gold Bonds, 1977 held by resident individual
b. Interest payable on 7% Gold Bonds, 1980 held by resident individual
8. If interest does not exceed 10,000 Rs.
a. Interest payable on 8% Savings (Taxable) Bonds, 2003
9. If interest does not exceed 5,000 Rs. & paid by a/c payee cheque
a. Interest payable to a resident individual being interest on debentures listed on a recognised stock
exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956),
and any rules made there under
10. Interest payable to the Life Insurance Corporation of India
11. Interest payable to the General Insurance Corporation of India
12. Interest payable to any other insurer in respect of any securities owned by it or in which it has full beneficial
interest;

2. 13. Interest payable on any security issued by a company, where such security is in dematerialised form and is
listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act,
1956 (42 of 1956) and the rules made thereunder
14. Any other interest notified in official Gazette by Central Govt.
Key Explanation to section 193
Where any income by way of interest on securities 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.
No TDS deduction if 15 G/ 15 H certificate provided
Tax is not deductible u/s 193 if the recipient makes a declaration in Form No. 15G/15H that their total income of the
previous year is less than minimum income liable to tax. 15 G is applicable for resident individuals not being senior
citizens and 15 H is applicable for resident senior citizens.