• The Person responsible for paying to a resident any income by way of interest on securities shall deduct income tax at the rates in force on the amount of interest paid/ payable.

PLEASE NOTE:

Person responsible for deducting TDS include in case of payments of income chargeable under the head "Interest on Securities, other than 

1. The payments made by or on behalf of the Central Govt. or the Govt. of State, the local authority, corporation or company, including the principal officer thereof. 

2. Interest payable to the LIC, GIC, or any of four companies formed under section 16(1) of the General Insurance Business (Nationalization) Act, 1972, or to any other insurer, is exempt from the requirement of tax deduction at source under section 193
   
   Interest on securities wherever referred to means the following as per Section 2(28B):

1. Interest on any security other than above mentioned exceptions;

2. Interest on debentures ((other than specified debentures) However, in case of debentures issued by a company in which the public are substantially interested which are listed on a recognised stock exchange, no tax need be deducted at source where the debentures are held by a resident individual if

   • The interest is paid by the company by an account payee cheque; and 

   • The aggregate amount of such interest paid or likely to be paid during the financial year by the company to such individual does not exceed Rs. 2,500. 

   This is to be noted that this interest should not be exempt from tax, else no TDS is required to be deducted