Income Tax Act

Official PDF pages 486–490

SOURCE PDF PAGE 486
Sl.
No.
Provisions for tax
deduction at source
Condition for no deduction on income or sum
A   B   C
( c )   interest income credited or paid—
( i )   by the Central Government under
any   provision   of   this   Act   or   the
Income-tax Act, 1961 (43 of 1961),
or the Estate Duty Act, 1953 (34 of
1953), or the Wealth-tax Act, 1957
(27 of 1957), or the Gift-tax Act, 1958
(18 of 1958), the Companies (Profits)
Surtax Act, 1964 (7 of 1964), or the
Interest-tax Act, 1974 (45 of 1974);
( ii )   in   respect   of   deposits   under   any   scheme
framed by the Central Government and
notified by it in this behalf;
( iii )   in respect of deposits (other than time
deposits made on or after the 1st July,
1995) with a banking company;
83
[ ( iv )   on the compensation amount awarded
by a Motor Accidents Claims Tribunal—
( A )   to an individual; or
( B )   to a person other than an individ -
ual, where the aggregate interest
on such compensation does not
exceed   `   50,000 during the tax
year; ]
( v )   or payable by an infrastructure capital
company; or infrastructure capital
fund; or infrastructure debt fund; or
a public sector company; or scheduled
bank in relation to a zero coupon bond
issued on or after the 1st June, 2005
by such company or fund or public
sector company or scheduled bank;
( vi )   as referred to in Schedule V (Table: Sl.
No. 3);
( vii )   by a firm to a partner of the firm.
83.   Substituted by the Finance Act, 2026, w.e.f.   1-4-2026 . Prior to its substitution, item ( iv ) read
as under :
“( iv )   by way of interest on the compensation amount awarded by the Motor Accidents
Claims Tribunal where the amount of such income or, the aggregate of the amounts
of such income does not exceed   `   50,000 during the tax year;”

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SOURCE PDF PAGE 487
Sl.
No.
Provisions for tax
deduction at source
Condition for no deduction on income or sum
A   B   C
8 .   Payments to contractors
referred to in section
393(1) [Table: Sl. No.
6( i )].
( a )   Where—
( i )   any sum credited or paid or likely
to be credited or paid during the tax
year to the account of a contractor
during the course of business of plying,
hiring or leasing goods carriages; and
( ii )   that contractor owns ten or less goods
carriages at any time during the tax
year; and
( iii )   furnishes a declaration to that effect
along with his Permanent Account
Number to the person paying or cred -
iting the sum; and
( iv )   the person responsible for paying to
the contractor furnishes to the pre -
scribed   income-tax   authority   the
particulars in such form and within
such time as may be prescribed;
( b )   where such sum is credited or paid by indi -
vidual or Hindu undivided family exclusively
for personal purposes of such individual or
any member of Hindu undivided family.
9 .   Fees   for   professional
or   technical   services
referred to in section
393(1) [Table: Sl. No.
6( iii )].
Where such sum is credited or paid by individual
or Hindu undivided family exclusively for personal
purposes of such individual or any member of
Hindu undivided family.
10 .   Dividend referred to in
section   393(1)   (Table:
Sl. No. 7).
Dividend income credited or paid to—
( a )   the Life Insurance Corporation of India
established under the Life Insurance Cor -
poration Act, 1956 (31 of 1956), in respect
of any shares owned by it or in which it has
full beneficial interest;
( b )   the General Insurance Corporation of India
or to any of the four companies, formed by
virtue of the schemes made under section
16(1) of the General Insurance Business
(Nationalisation) Act, 1972 (57 of 1972),
in respect of any shares owned by the
Corporation or such company or in which
the Corporation or such company has full
beneficial interest;

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SOURCE PDF PAGE 488
Sl.
No.
Provisions for tax
deduction at source
Condition for no deduction on income or sum
A   B   C
( c )   any other insurer in respect of any shares
owned by it or in which it has full beneficial
interest;
( d )   a “business trust”, as defined in section
2( 21 ) ,   by a special purpose vehicle referred
to in Schedule V (Note 2);
( e )   any other person as may be notified by the
Central Government in this behalf;
( f )   a shareholder, being an individual, if—
( I )   the dividend is paid by the company
by any mode other than cash; and
( II )   amount or aggregate of amounts of
such dividend distributed or paid or
likely to be distributed or paid during
the tax year does not exceed   `   10,000.
11 .   Payment by e-commerce
operator to e-commerce
participant referred to in
section 393(1) [Table: Sl.
No. 8( v )].
Where the amount is credited or paid or likely
to be credited or paid during the tax year to the
account of an e-commerce participant, which is—
( a )   an individual or a Hindu undivided family;
and
( b )   the gross amount of the sales or services or
both during the tax year does not exceed
`   5,00,000; and
( c )   the e-commerce participant has furnished
the Permanent Account Number or Aadhaar
number to the e-commerce operator.
12 .   Payment   on   transfer
of virtual digital asset
referred to in section
393(1) [Table: Sl. No.
8( vi )].
Where value or aggregate value of such consid -
eration during the tax year does not exceed—
( a )   `   50000, when payable by an individual or
a Hindu undivided family,—
( i )   whose total sales, gross receipts or
turnover from the business carried
on by him or profession exercised by
him does not exceed one crore rupees
in case of business or fifty lakh rupees
in case of profession, during the tax
year immediately preceding the tax
year in which such virtual digital asset
is transferred;

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SOURCE PDF PAGE 489
Sl.
No.
Provisions for tax
deduction at source
Condition for no deduction on income or sum
A   B   C
( ii )   not having any income under the
head “Profits and gains of business
or profession”;
( b )   `   10000, when payable by any person other
than the person referred to in clause ( a ).
13 .   Income from units of a
business trust referred to
in section 393(2) (Table:
Sl. No. 6).
Income of the nature referred to in Schedule
V [Table: Sl. No. 3.B( b )], if the special purpose
vehicle referred to in the said clause has not
exercised the option under section 200.
14 .   Income   in   respect   of
units of investment fund
referred to in section
393(2) (Table: Sl. No. 8).
Income that is not chargeable to tax under the
provisions of this Act.
15 .   Income   in   respect   of
units of non-residents
referred to in section
393(2) (Table: Sl. No. 10).
Income payable in respect of units of the Unit
Trust of India to a non-resident Indian or a
non-resident Hindu undivided family, subject to
prescribed conditions.
16 .   Income of Foreign Insti -
tutional Investors from
securities referred to in
section 393(2) (Table: Sl.
No. 15).
Income, by way of capital gains arising from the
transfer of securities referred to in section 210, if
payable to a Foreign Institutional Investor.
17 .   Income   of   Specified
Fund   from   securities
referred to in section
393(2) (Table: Sl. No. 16).
Income is exempt as per Schedule VI (Table: Sl.
Nos. 1 to 4).
18 .   Payment   of   certain
amounts in cash referred
to   in   section   393(3)
(Table: Sl. No. 5).
Payment made to—
( a )   the Government;
( b )   any banking company or co-operative soci -
ety engaged in carrying on the business of
banking or a post office;
( c )   any business correspondent of a banking
company or co-operative society engaged
in carrying on the business of banking, as
per the guidelines issued in this regard by
the Reserve Bank of India under the Reserve
Bank of India Act, 1934 (2 of 1934);
( d )   any white label automated teller machine
operator of a banking company or co-oper -
ative society engaged in carrying on the

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SOURCE PDF PAGE 490
84.   Shall be renumbered as sub-section (6)( a ) thereof by the Finance Act, 2026, w.e.f.   1-4-2027 .
Sl.
No.
Provisions for tax
deduction at source
Condition for no deduction on income or sum
A   B   C
business of banking, as per the authorisation
issued by the Reserve Bank of India under
the Payment and Settlement Systems Act,
2007 (51 of 2007).
19 .   Payment in respect of
deposits under National
Savings Scheme, etc.,
referred to in section
393(3) (Table: Sl. No. 6).
Payment made to heirs of an assessee.
(5) Irrespective of anything contained in this Chapter, the tax shall not be deducted
by any person from any amount payable to—
( a )   the Government; or
( b )   the Reserve Bank of India; or
( c )   a corporation established by or under a Central Act which is, under any
law in force, exempt from income-tax on its income; or
( d )   a Mutual fund as specified at Schedule VII (Table: Sl. No. 20 or 21), where
such amount is payable to it by way of—
( A )   interest; or
( B )   dividend in respect of any securities or shares owned by it or in
which it has full beneficial interest; or
( C )   any other income accruing or arising to it.
(6)  
84
[ ( a ) ]   The deduction of tax shall not be made under provisions referred to in
column C of the Table below, in the case of a person as specified in column B, if
such person furnishes to the person responsible for paying any income or sum of
the nature referred to in such provisions, a written declaration in duplicate in such
form and manner as may be prescribed that the tax on such person’s estimated total
income of the tax year in which such income or sum is to be included in computing
his total income shall be   nil.
TABLE
DECLARATION FOR NO DEDUCTION AT SOURCE
Sl.
No.
Person   Provisions for tax deduction at source
A   B   C
1 .   An individual being a
resident.
( a )   payment of accumulated balance due to an
employee referred to in section 392(7);
( b )   insurance Commission referred to in section
393(1) [Table: Sl. No. 1( i )];
( c )   rent referred to in section 393(1) [Table: Sl.
No. 2( ii )];