Instructions for deduction of tax at source from interest on securities during the financial year 1971-72 at the rates speci­fied in Part III of First Schedule to Finance (No. 2) Bill, 1971

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....from interest on Government securities after May 28, 1971. It is requested that a circular on the basis of this draft may be issued by you immedi­ately to all Treasury Officers and Sub-Treasury Officers under your control, individually. Circular : No. 59 [F. No. 275/37/71-ITJ], dated 3-6-1971. DRAFT CIRCULAR REFERRED TO IN INSTRUCTIONS 1. I am to invite your attention to this Office Letter........regarding deduction of income-tax and surcharge from interest on Government securities during the financial year 1970-71. 2. According to the Finance (No. 2) Bill, 1971, income-tax is to be deducted from the entire amount of interest on securities at the following rates namely : Income-tax Rate of income-tax Rate of surcharge I. In th....

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....yment or crediting interest on Government securi­ties on or after May 28, 1971 you should, therefore, deduct income-tax at the rates specified above, except in the cases where an exemption or abate­ment certificate granted by an Income-tax Officer under sub-section (1) of section 197 is produced. The following instruc­tions should be followed in this connection : (1) Exemption or abatement certificates issued before April 1, 1971, authorising deduction of tax at a particular rate expressed as percentage of the amount of interest should be accepted and acted upon, if operative for the financial year ending on March 31, 1972. (2) Where a certificate is issued by the Income-tax Officer on or after April 1, 1971 authorising deduct....

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....x should be deducted from interest payable on National Savings Certificates (First Issue) including National Savings Certificates (First Issue) Bank Series or 7-year National Sav­ings Certificates (Fourth Issue). (7) No tax should be deducted from any interest payable on any other security of the Central or State Government where the security is held by a resident individual, and the holder makes a declaration in writing before you to the effect that : (a) he has not previously been assessed under the 1961 Act, or under the 1922 Act; (b) his total income of the previous year in which the interest is due is not likely to exceed the maximum amount not chargeable to income-tax; and (c) the total nominal value of the securities held ....