PSA: TDS on listed NCDs from 1st April 2023

This is a delicate reminder for many who have invested sizeable cash in company bonds…As of now there was no TDS on curiosity credit if the bonds had been held in demat kind (nevertheless curiosity earnings is taxed at slab charges). that is set to alter from FY 23-24. In this yr’s funds, they’ve executed away with the prevailing clause (ix) of proviso to Sec. 193 & TDS will now be deducted (if it crosses the Rs5000 pa threshold),

Interestingly I’ve bond holdings throughout tranches in a number of firms however solely L&T Finance has bothered to ship an electronic mail by way of its RTA with the reminder & deets. So if anybody is eligible to replenish 15G/15H then they’ll replenish the kinds & declare exemption. But pls don’t replenish the kinds to avoid wasting on petty TDS in case you are ineligible… you’ll solely complicate issues for your self & incur the taxman’s wrath.

btw what’s with the low Rs5000 pa curiosity threshold for TDS on firm FDs & company NCDs… I imply even for financial institution FD curiosity they needed to hike it to Rs40000 pa (from Rs10000 pa) per financial institution threshold in 2019 & this Rs 5000 threshold has remained. fixed since grandfather’s time. And its not like it’s not getting taxed. It might be ultimately taxed at slab price anyway whereas submitting returns.

PS:They are tightening the nostril each single place. Remember how there was no TDS on curiosity in FDs from co-op banks should you held co-op financial institution shares (once more it was taxed at slab charges)? They did away with that loophole in 2015… The publish workplace investments weren’t seen anyplace & I do know of loads of ppl who would earlier not reveal it solely of their ITR. But the get together ended final March. Similarly for these company bond investments. Now they are going to present up in 26AS, AIS/ TIS… Make positive you file your returns with full disclosure. The previous days are gone. Many ppl have immediately recd notices this month for FY2019 & even earlier…

The rise in TDS/TCS implies that taxpayers are giving an unlimited interest-free mortgage to the federal government. TDS/TCS is collected prematurely however refunds come after returns are filed. Gautam Nayak, CA, says “Given the big measurement of the refunds, virtually ₹3 trillion, that could be a substantial interest-free float for the federal government. Further, the curiosity acquired from the start of subsequent yr is simply 6% every year, and that, too, is taxable”.

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