Tax deduction at source for interest on securities requires withholding on credit or payment and strict depositor compliance. Deduction of tax at source under section 193 must be made when interest on securities is credited or paid, with credit to any suspense or other account deemed to be credit to the payee. The Finance Act, 1994 prescribes withholding rates and a surcharge for domestic companies, while exemptions and lower deduction apply where conditions are met (listed debentures paid by account-payee cheque below the resident threshold, Form No. 15F declarations, certificates under section 197, and statutory or notified exempt securities). Deductors must deposit tax timely, issue Form No. 16A, quote TAN, file annual returns in Form No. 25, and comply with rounding and penalty provisions.