FINANCE (NO. 2) ACT, 1991

Tax withholding rules expanded to cover broader payments, allow treaty-adjusted rates and provide procedural reliefs.

The Finance (No. 2) Act, 1991 amends tax law to set rates and surcharge treatments for 1991-92, expands and clarifies the scope of tax deduction at source and withholding (including new TDS provisions on bank interest, lottery agents, National Savings withdrawals, commission/brokerage), creates substantive amendments and new sections for sectoral incentives (software exports, processed minerals, hotels in remote areas, social welfare projects), revises depreciation and bad debt taxation for financial institutions (section 43D), modifies procedural and assessment timelines, and introduces an Interest tax on credit institutions with accompanying compliance and penalty regimes.