No TDS require to be deduct on Interest payable on FDRs made in the name of the court

No Requirement to deduct TDS on Interest payable on FDRs made in the name of the Registrar General of court.

In the Honorable Delhi High Court, UCO Bank Versus DCIT


Bank accepted a Fixed Deposit (FD) in the name of Register General of this Court and issued a Fixed Deposit Receipt (FDR).

ACIT issued a show cause notice  to the petitioner bank for not deducting TDS on the interest accrued and to show cause why the petitioner bank be not treated as an assessee in default under Section 201(1)/201(1A) of the Act. The petitioner, by its reply, submitted that the said FD was in the name of Register General of this Court as a custodian and no TDS was deducted on the accrued interest because the actual beneficiary was not known as the matter was sub judice. It was also submitted that the TDS would be deducted on when payment is made to the beneficiary as may be decided by the Court. Continue reading

No TDS on award & interest thereon w.r.t. motor accident claims cases

No TDS shall be deducted on claim amount and interest on the deposits, made under the orders of the court in motor accident claims cases.

Circular 8/2011 issued on 14-10-2011 stated that when litigant is directed by the court that a specified amount be deposited in the bank directly or through the court w.r.t motor accident claims. The bank shall in accordance with the provisions of the Act, deduct TDS on the interest accruing on the above mentioned deposit(s) as per existing procedure and at the rates in force. The certificate of deduction of tax shall be issued by the bank in the name of ‘the depositor’.

In nutshell, above circular directed banks to deduct TDS on deposits made in banks w.r.t motor accident claims. Continue reading