Instructions for deduction of tax at source from interest on securities during financial year 1974-75 at the rates specified in Part III of First Schedule to Finance Bill, 1974

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.... 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. 129 [F.No. 275/35/74-ITJ], dated 12-3-1974. 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 1973-74. 2. According to the Finance Bill, 1974, 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 the case of a person other than a comp....

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.... a  domestic company—       (a) on   interest   payable  on  a   tax-free security 44 per cent 2.2 per cent   (b) on interest on other securities 70 per cent 3.5 per cent 3. The term "domestic company" means an Indian company, or any other company which in respect of its income liable to income-tax under the Act for the assessment year commencing on April 1, 1974 has made the prescribed arrangements for the declaration and payment within India of the dividends (including dividends on preference shares) payable out of such income in accordance with the provisions of section 194. 4. In making payment or crediting interest on Government secur....

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....as the case may be, the 7 per cent Gold Bonds, 1980 held by him (includ­ing such Bonds, if any, held on his behalf by any other person) did not in either case exceed Rs. 10,000 at any time during the period to which the interest relates. (5) No tax should be deducted from interest payable to a non-resident on 4¼ per cent National Defence Loans, 1968 and 4¾ per cent  National Defence Loans, 1972, as the interest paid on these loans to non-residents is totally exempt from income-tax under Notification No. SO 3331, issued under section 10(4). In the case of residents receiving interest on these loans, deduc­tion of tax has to be made at the prescribed rates, except when the recipient is an individual. (6) No tax should be ....