Withholding tax on deposit interest widened to cover bank and cooperative non time deposits, with time deposits excluded.

The amendment replaces clause (vii) of section 194A(3) to subject income on deposits (other than time deposits) with banking companies and with specified cooperative banking entities to the withholding regime. Clause (viia) adds primary agricultural credit societies, primary credit societies, co-operative land mortgage banks, co-operative land development banks, and cooperative societies engaged in banking to the list of payers whose non-time deposit interest is covered. "Time deposits" are defined to exclude recurring deposits and mean deposits repayable on expiry of a fixed period.

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