Understanding Exemptions Under Section 194A of the Income Tax Act

Learn about the exemptions for TDS on interest income under Section 194A, including details on eligible entities and forms.

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Section 194A of the Income Tax Act deals with TDS on interest income. Exemptions include interest paid by banks or financial institutions up to INR 10,000. Additionally, recipients like insurance companies, mutual funds, and certain government bodies are exempted. Senior citizens can also claim exemption using Form 15H to avoid TDS on their interest income.

FAQs & Answers

  1. What is Section 194A of the Income Tax Act? Section 194A pertains to the Tax Deducted at Source (TDS) on interest income, primarily applicable to banks and financial institutions.
  2. What are the exemptions under Section 194A? Exemptions under Section 194A include interest income from banks or financial institutions up to INR 10,000, as well as certain recipients such as insurance companies, mutual funds, and government bodies.
  3. Who can claim exemption from TDS under Section 194A? Senior citizens can claim exemption from TDS under Section 194A by submitting Form 15H to avoid deduction on their interest income.
  4. How does Form 15H work under Section 194A? Form 15H allows senior citizens to declare that their total income is below the taxable limit, thereby enabling them to receive interest payments without TDS deductions.

Watch More

If you found this video on Section 194A helpful, we encourage you to explore our content on related topics such as 'Understanding TDS: Key Sections Explained', 'How to File Income Tax Returns for Interest Income', and 'Income Tax Benefits for Senior Citizens'. These resources will deepen your knowledge of income tax regulations and help you make informed financial decisions.

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