TDS will not to be deducted on interest paid to MUDRA

TDS is deducted @10% on interest income from fixed deposits, recurring deposits etc.

Who should deduct TDS?

Any company or bank who pays interest to a Resident must deduct TDS at the time of making payment.

Note: Individuals or HUFs dont have to deduct TDS.

However individuals or HUFs have to deduct TDS if they run a

  • Profession where gross receipts are more than Rs 25lakhs

OR

  • Business where turnover are more than Rs 1crore

in the financial year immediately before the financial year in which interest is paid.

[these provisions have been laid down under section 194A of the income tax act]

No TDS shall be deducted on interest paid to MUDRA

The government has notified that no TDS shall be deducted on interest paid to MUDRA or Micro Units Development & Refinance Agency Limited.

As per CBDT notification [Notification No. 65/2016/F. No. 275/28/2015-IT (B)] dated 5th August 2016.

 

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