Provisions at a glance , Provisions explained

Interest-tax on bank interest imposes a levy on scheduled banks and sets return, assessment, advance-payment and penalty rules.

A special tax applies to the gross amount of interest received by scheduled banks on loans and advances made in India, measured as chargeable interest for relevant previous years, excluding interest on loans to other scheduled banks and interest accruing before 1-8-1974. Administration is by income-tax authorities with prescribed returns, assessments, reassessments and self-assessment and advance-payment obligations. Specific penalties and recovery procedures mirror income-tax provisions; rulemaking, exemption powers and prosecution measures are provided, and a schedule lists the banks covered.