Hello friends, how are you all?
I hope you all are doing well.
Till now we were discussing about a tedious topic and we
had gathered information about 3-4 sections in this topic.
A section similar to this is 194A which says interest other
than interest on securities.
Interest other than interest on securities.
Will someone tell me that interest on securities when we
read
what was the rate in that case?
Interest on securities.
Government bonds etc.
bonds of normal companies etc.
In that case, the interest on securities what was the rate?
In that case, I think the rate was 10%.
10% rate.
Now what we are reading is talking about interest only.
But it is not the interest on securities.
All the interest on securities has been covered there.
In 193.
This is the second interest.
What is this interest?
Sir, this is the interest that you have made an FD in a
bank.
You are getting annual interest from there.
Now everyone will stand up that this is a very common thing.
Does this also look tedious?
Answer is yes.
It looks like that.
It has a limit that if your interest is above this limit
then you will get interest.
Otherwise, you will not get interest.
Interest.
On whom?
On FD.
What is this interest?
It is your income.
And whatever income you will earn you will have to pay
what? Income tax.
And when will you have to pay it?
When you are receiving then the person who will pay you the
source who is paying you will pay you by deducting the
money.
The money of interest will be deducted.
The deducted portion will go to your income tax account and
deposit it.
It will be done, sir.
It is a simple provision.
You have given a loan to a person.
Here is a loan of 1 crore.
Now you have given a loan of 12% interest.
Annually on you whatever you will get of 12 lakhs interest
will come.
What is this?
It is interest.
It is other than securities.
So this is interest.
On this also your TDS provisions will be applied, sir.
What is the rate in this case?
The rate is 10%.
If you are receiving the interest of 12 lakhs it is not
securities.
It is other than securities.
If you receive that then according to 10% your TDS will be
deducted.
You will get 90% money.
It will be assumed that 10% will be deducted from your
income tax.
Who deducts?
When? How?
Let us start the reading.
194A Interest on interest other than interest on securities.
Because interest on securities is also 10%.
Confusion comes here.
Interest on securities bonds etc.
is also 10%.
Here also it is 10%.
The difference is that it is securities.
Here apart from securities all other things come.
Let us see this section.
Who should be deducted?
Who will deduct?
It applies to interest other than interest on securities
credited or paid by SSE other than individual.
Someone is giving interest other than individual.
Other than individual means it can be a company.
It can be a firm.
It can be an association of persons.
All these things can be there.
Up to this point it is understood that there is a company
who has taken a loan from someone and on that loan the
company is paying interest.
So the interest that will be paid will be deducted.
10% will be deducted from the interest.
Up to this point it is understood.
Now what is the next point?
It is applicable to individual HUF that it is applicable on
top also if their turnover of last year is more than 1
crore or if their gross receipts are more than 50 lakhs
in case of individual HUF.
It is fully applicable on companies who are paying.
Who are we talking about?
The person who is paying interest.
It is fully applicable for companies.
But it is applicable for individual when last year sales
were more than 1 crore or if it was professional gross
receipts were more than 50 lakhs.
Have you ever seen this figure?
Have we ever discussed about this figure in our life?
Do you remember your last birth?
When we discussed
that the limit of 1 crore and 50 lakhs came under section
44A of tax audit.
You had to get tax audit from a qualified chartered
accountant.
Do you remember?
Do you remember such things?
Or have you forgotten?
If your turnover is more than 1 crore and 50 lakhs last
year, then section 194A is also applicable on you.
When do you have to deduct?
At the time of payment or credit whichever is earlier.
When you are paying interest, then you have to deduct.
Yes, if you don't pay interest, you have just passed
general entry in the name of that person that you are
paying interest.
If you put interest on due basis in P&L account, that will
also be accepted.
It will be accepted that you have paid.
That person's income will also be taxable on due basis.
You have not paid.
But interest has become due.
You have not paid.
You will show your expenses on due basis in books.
Think in your mind.
You will show your two sides in P&L account, two interests.
That person will also consider his income on due basis.
When he has accepted his income, you have shown your
expenses.
If you have accepted income, then deduct income tax also.
Deduct TDS there.
Credit or payment, whichever is earlier.
Come, sir.
What is the rate? 10% rate.
But what all things are not applicable?
This is very important.
Where all are not applicable?
Whenever a section talks about tax, first of all see on
whom it is not applicable.
Sometimes you will read 50 pages of the whole section to
see whether it is applicable on you or not.
And on page 51 it will be written that it is not applicable
for this.
So first of all see on whom it is applicable and on whom it
is not.
Come, sir.
If the interest is up to Rs.
5000, it is a small amount for the government.
For us, it is a big amount.
For us, Rs. 5000 is also a big amount.
I am such a person that even if Rs.
1 falls into the gutter,
I will take off my coat, take off my shirt, take off my
pant and jump into it to collect Rs.
Rs. 5000 is not a big amount for the government.
No problem, sir.
And this limit of Rs.
5000 becomes Rs.
40000 if a banking company is giving you interest.
You get FD done in every bank.
You get ID done.
If you get an interest up to Rs.
40000 in the whole year, then there will be no interest.
Yes, but instead of Rs.
40000, it would have been Rs.
It would have been Rs.
50000, Rs.
60000, and in that case, your interest would have been
deducted.
Sir, what to do now?
Generally, interest is deducted.
Many people get FD done in banks.
Sometimes, there can be two cases.
You get an FD done in a bank for Rs.
5-7 lakhs.
Either you take its interest annually or you leave the
interest to reinvest in it.
It will keep increasing.
In both the cases, you will get an income.
Either you are receiving it or you are getting credit in
its account.
Payment or credit, whichever is earlier.
Yes, you didn't receive it.
A poor person will say,
I didn't receive the interest.
I am telling you to keep increasing the interest.
Keep reinvesting.
But your income will be accepted.
Getting an interest or getting credit, your income will be
accepted.
Your TDS will be deducted.
Now, what to do in practical life?
Whenever you go to file your return, there is a form 26AS.
Download it.
You will get all the details about how much TDS has been
deducted.
You will get how much TDS has been deducted on the net
figure.
Finally, when you deposit your tax, minus the figure on the
net figure.
Did you understand the point?
Whether you are receiving the interest or reinvesting it,
your income will be accepted.
It will be accepted.
What does income mean?
Either you received it or you got credit in its account.
He got credit.
You didn't receive it. He got credit in his book.
His income is due.
If the income is due, the TDS will be deducted.
Why will the TDS be deducted?
Because it is written here, payment or credit, whichever is
earlier.
This is the point.
Anyway, we were talking about the limit.
The limit is 40,000 rupees where the payer is a banking
company or a co-operative society whose job is banking.
It is said, Nainital Co-operative Bank, Jammu & Kashmir
Co-operative Bank,
a co-operative bank.
Do you get any interest from the post office?
If the interest is up to 40,000, then no TDS will be
deducted.
But if it is more than 40,000, then the TDS will be
deducted.
And it is said that there will be a limit of 50,000.
If there is a senior citizen, someone above the age of 60
in your house,
pay attention to the person who is above the age of 60 and
if he has any interest of FD, if the interest is up to
50,000, then no TDS will be deducted.
But if it is more than 50,000, then the TDS will be
deducted.
When you file his return, deduct the tax from it.
Many people forget to deduct the TDS.
Then the payment of double tax is done.
They themselves do not remember.
Sir, this thing has to be deducted at the time of final
payment.
See, what is this?
Limit will be calculated with respect to income credited or
paid by the branch.
If the branch pays, the limit of 40,000 will be calculated
according to every branch.
If your only bank eats in this branch, if your bank eats in
another branch, for example, the limit of 40,000 will be
calculated according to every branch.
It will not be calculated according to every bank.
It has to be calculated according to every bank when the
core banking system is being used.
In today's date, the core banking system of the bank,
CBS software is being used.
Sir, what is CBS software?
CBS software is, for example, if you have an account in a
branch in Ghaziabad,
SBI branch in Ghaziabad, you have reached Meerut.
And you have to know the details of your account.
In the old days, the branch in which your account used to
be, the branch in which your account used to be, you had to
go there and get the details.
You have to get a statement, you have to update your
passbook, you have to get some details.
The branch in which your account used to be, you had to go
there.
Now with core banking, you can go anywhere in the world,
and you need the details of your account, you will get it
from any branch. What has happened with core banking?
All the details are in one place.
And in today's date, 100% banks,
I am not even saying 90%, 100%, all the banks, follow the
core banking system.
So in the core banking system, the limit of Rs.
40,000, or Rs.
50,000, don't check it branch-wise, check it bank-wise.
Meaning, you have two accounts, one in SBI and one in HDFC.
And from one, you get an interest of Rs.
39,000, and from the other,
you get an interest of Rs. 39,900.
In that case, no TDS will be deducted.
In that case, it is coming from different banks.
So there is a loophole.
There can be a loophole.
If you want to get FD done, and you don't want to get TDS
deducted on your interest, you can do one thing, that the
amount of FD, don't get it done in just one bank.
Break that amount.
Some money in one bank, some in another,
some in the third, some in the fourth.
Look at the limit per bank.
It should be below Rs. 40,000.
It's a simple point.
Come here.
I keep telling you all the ways to steal.
Don't spread it in the market.
Okay?
There are some things where you get interest, but no TDS is
deducted on it.
Like a partnership firm, if the partners get interest,
you get income tax refund.
What does income tax refund mean?
It means that you used to get a tax of Rs.
1 lakh throughout the year.
But TDS kept reducing.
TDS reduced to Rs. 1,10,000.
You had to give Rs. 1 lakh.
And TDS reduced to Rs. 1,10,000.
What I have always been saying is, whatever is the final
tax payment, deduct TDS from it.
The amount of money that has been deducted.
If you deduct Rs.
1,10,000 from Rs.
1 lakh,
you will get minus Rs. 1,10,000.
What is this minus Rs.
I have to take this money back from the government.
I called the government and said,
Nirmala Tai, Ram Ram.
They said, Ram Ram.
I said, Tai, my income tax used to be Rs.
But the useless people deducted
Rs. 1,10,000 from my TDS.
You have extra Rs. 1,10,000.
Kindly give me a refund of Rs.
This is the income tax refund.
Extra tax goes to the government.
You get a refund for that.
If you get any interest on that refund, it will not be
covered here.
No TDS on that too.
Don't deduct TDS on that.
This was the point.
These are some points.
In which topics, TDS will not be covered.
These are the points.
Take a look at this.
This is an illustration.
On 1st October, Harish made a 6-month FD in ABC
Co-operative Bank.
The FD was matured in March.
It took 6 months of interest.
Rs. 10,00,000 for 9 tickets.
Rs. 90,000 for 1 year.
Rs. 45,000 for 6 months.
Rs. 45,000 is above the limit of Rs. 40,000.
It is obvious.
Rs. 45,000 will reduce TDS by 10%.
How much? Rs. 4,500.
Take a look at the answer.
The answer is the same.
According to 10%, the interest was Rs.
If the interest was Rs.
45,000, according to 10%, Rs.
45,000 will reduce TDS.
How much will that person receive?
Rs. 40,500.
Rs. 45,000 will be shown
to him.
This is the point.
He made 3 FDs.
Rs. 3,00,000 each.
One in Dwarka branch, one in Janakpuri branch, one in
Rohini branch.
Bank which has opted for the CBS.
I told you to look at each bank.
He made 3 branches in one bank.
In that case, if it is more than Rs.
40,000, it will be deducted.
How much is the total interest?
The total interest is Rs. 60,750.
If it is more than Rs.
Rs. 60,750 will be deducted.
In this case, he could have made FDs in different banks.
This fool did this.
He made FDs in 3 branches in one bank.
He didn't know.
In this case, he should have made FDs in different banks
and divided the total in 3 branches. he should have made
FDs in various banks and distributed it evenly.
He should have lost this much interest.
Then nobody would have been caught in TDS. This is the
point.
Our topic is 194A.
Hope it has been clear to you.
Thank you very much, friends.
Thank you.