law: The Income-Tax Act, 1961
  193. Interest on securities.-
  2[The person responsible for paying to a residentany income] 3[by way of interest on securities] shall, 4[at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier], deduct income-tax5*** at the rates in force on the amount of the interest payable:
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  7[Provided 8*** that no tax shall be deducted from-
  (i) any interest payable on 4¼ per cent National Defence Bonds, 1972, where the bonds are held by an individual, not being a non-resident; or
  9[(ia) any interest payable to an individual on 4¼ per cent National Defence Loan, 1968, or 4¾ per cent. National Defence Loan, 1972; or]
  10[(ib) any interest payable on National Development Bonds; or]
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  12[(iia) any interest payable on 7-Year National Savings Certificates (IV Issue); or
  13[(iib) any interest payable on such debentures, issued by any institution or authority, or any public sector company, or any co-operative society (including a co-operative land mortgage bank or a co-operative land development bank), as the Central Government may, by notification in the Official Gazette, specify in this behalf;]]
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  (iii) any interest payable on 6½ per cent Gold Bonds, 1977, or 7 per cent. Gold Bonds, 1980, where the Bonds are held by an individual not being a non-resident, and the holder thereof makes declaration in writing before the person responsible for paying the interest that the total nominal value of the 6½ per cent Gold Bonds, 1977, or, 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 ten thousand rupees at any time during the period to which the interest relates;]
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  2[(iv) any interest payable on any security of the Central Government or a State Government:]
  3[Provided that nothing contained in this clause shall apply to the interest exceeding rupees ten thousand payable on 8% Savings (Taxable) Bonds, 2003 4[or 7.75% Savings (Taxable) Bonds, 2018] during the financial year;]
  5[(v) any interest payable to an individual or a Hindu undivided family, who is resident in India, on any debenture issued by a company in which the public are substantially interested, if-
  (a) the amount of interest or, as the case may be, the aggregate amount of such interest paid or likely to be paid on such debenture during the financial year by the company to such individual or Hindu undivided family does not exceed five thousand rupees; and
  (b) such interest is paid by the company by an account payee cheque;]
  6[(vi) any interest payable to the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), in respect of any securities owned by it or in which it has full beneficial interest; or
  (vii) any interest payable to the General Insurance Corporation of India (hereafter in this clause referred to as the Corporation) or to any of the four companies (hereafter in this clause referred to as such company), formed by virtue of the schemes framed under sub-section (1) of section 16 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972), in respect of any securities owned by the Corporation or such company or in which the Corporation or such company has full beneficial interest; or
  (viii) any interest payable to any other insurer in respect of any securities owned by it or in which it has full beneficial interest;]
  7[(ix) any interest payable on any security issued by a company, where such security is in dematerialised form and is listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and the rules made thereunder.]
  8[Explanation 9***.-For the purposes of this section, where any income by way of interest on securities is credited to any account, whether called "Interest payable account" or "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.]
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  2. Subs. by Act 32 of 2003, s. 72, for "The person responsible for paying any income" (w.e.f. 1-6-2003).
  3. Subs. by Act 26 of 1988, s. 37, for 'chargeable under the head "Interest on securities"' (w.e.f. 1-4-1989).
  4.Subs. by Act 13 of 1989, s. 22, for "at the time of payment" (w.e.f. 1-6-1989).
  5. The words "and super-tax" omitted by Act 10 of 1965, s. 45 (w.e.f. 1-4-1965).
  6. The first proviso omitted by Act 18 of 1992, s. 70 (w.e.f. 1-6-1992).
  7. Subs. by Act 15 of 1965, s. 13, for the proviso (w.e.f. 11-9-1965).
  8. The word "further" omitted by Act 18 of 1992, s. 70 (w.e.f. 1-6-1992).
  9. Ins. by Act 41 of 1965, s. 4 (w.e.f. 4-12-1965).
  10. Ins. by Act 19 of 1978, s. 20 (w.e.f. 1-4-1978).
  11. Clause (ii) omitted by Act 26 of 1988, s. 37 (w.e.f. 1-4-1989).
  12. Ins. by Act 19 of 1970, s. 22 (w.e.f. 1-4-1970).
  13. Subs. by Act 28 of 1986, s. 29, for clause (iib) (w.e.f. 1-6-1986).
  14. The Explanation omitted by Act 11 of 1987, s. 74 (w.e.f. 1-4-1987).
  1. Clause (iiia) omitted by Act 26 of 1997, s. 46 (w.e.f. 1-6-1997).
  2. Subs. by s. 46, ibid., for clause (iv) (w.e.f. 1-6-1997).
  3. Ins. by Act 22 of 2007, s. 52 (w.e.f. 1-6-2007).
  4. Ins. by Act 13 of 2018, s. 48 (w.e.f. 1-4-2018).
  5. Subs. by Act 23 of 2012, s. 72, for clause (v) (w.e.f. 1-7-2012).
  6. Ins. by Act 20 of 2002, s. 72 (w.e.f. 1-6-2002).
  7. Ins. by Act 18 of 2008, s. 42 (w.e.f. 1-6-2008).
  8. Ins. by Act 13 of 1989, s. 22 (w.e.f. 1-6-1989).
  9. The figure "1" omitted by Act 18 of 1992, s. 70 (w.e.f. 1-6-1992).
  10. Explanation 2 omitted by s. 70, ibid (w.e.f. 1-6-1992).