No TDS on payments to government and exempt entities; interest, dividends and other income excluded from withholding. Section 196 provides that no deduction of tax at source (TDS) is to be made from sums payable to the Government, the central banking authority, certain corporations established by or under a Central Act that are exempt from income tax, and mutual funds specified under the exemption provision, applying to interest, dividend and other income accruing or arising to such recipients.