No TDS on Payments to Government, RBI, Certain Corporations, or Specified Mutual Funds Under Section 196 of Income Tax Act.
Section 196 of the Income Tax Act specifies that no tax deduction at source (TDS) is required on sums payable to the Government, the Reserve Bank of India, certain corporations established under a Central Act that are exempt from income tax, or specified Mutual Funds. This applies to sums payable as interest or dividends on securities or shares owned or fully beneficially owned by these entities, or any other income accruing to them.