Concept - real beneficiary for deducting TDS

[RUPESH SRIVASTAVA]

Client of mine received compensation and he apporached the court for higher compensation and mean time the compensation received was kept with a bank in fixed deposit account in the name of the court were my client was beneficiary. later case was decied my client favour and Fixed deposit was transferred in my clients name along with interest and interest was claimed as exempt income. in the due course banks have deducted TDS on interest that too after six months from the due date for deducting TDS. now my querry is 1. is there any concept called real beneficiary for deducting TDS from interest income. 2.whether the TDS deducted by bank was late whether the same is allowed. 3. as per section 194A read with section 196 governments are exempted from deducting TDS, whether courts are also come under this provisions.

AI Summary

Client's Fixed Deposit Interest Exemption and TDS Deduction Timing Under Sections 194A, 196, and Rule 37BA Explained. A client received compensation, which was kept in a fixed deposit by the court, with the client as the beneficiary. After winning the case, the deposit and accrued interest were transferred to the client's name, and the interest was claimed as exempt income. The bank deducted TDS on the interest six months late. The queries raised were about the concept of the real beneficiary for TDS deduction, the allowance of late TDS deduction, and whether courts are exempt from TDS under sections 194A and 196. The response suggested referencing rule 37BA of the income tax rules and advised on claiming TDS benefits.