TDS on interest

Total amount of interest, accrued on the principal amount of compensation is to be apportioned on financial year to financial year basis and if the interest payable to claimant for any financial year exceeds Rs.50,000/then only insurance company/owner is/are entitled to deduct appropriate amount under the head of ‘Tax Deducted at Source’ as provided u/s 194A (3) (ix) of the Income Tax Act, 1961 and if the amount of interest does not exceeds Rs.50,000/in any financial year, Registry of this Tribunal is directed to allow the claimants to withdraw the amount without producing the certificate from the concerned Income Tax Authority. The aforesaid view has been reitera ted by this High Court in Review Application No.1 of 2020 in FAFO No.23 of 2001; decided on 26.11.2020 (Sudesna vs. Hari Singh) while disbursing the amount. 

Case Law:

Suchi Sharma and another vs. U.P. State Road Trans. Corpn. and others, 

Citation:

2022 ACJ 1815