Interest income withholding requires deduction at rates in force, with recipient-based thresholds and permitted in-year tax adjustments.

Section 393(1), Serial No. 5 requires tax deduction at Rates in force on interest on securities and specified categories of interest other than interest on securities, subject to applicable thresholds. Bank, co-operative bank, and notified Post Office interest has higher thresholds for senior citizens than other recipients, while interest paid by specified persons is subject to a separate threshold. Rates in force follow the relevant Finance Act and, for non-residents, may include surcharge and cess subject to treaty relief. Branch-wise threshold computation is available where Core Banking Solutions have not been adopted, and in-year adjustment of excess or short deduction is permitted.

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