As per Indian Income Tax Act, "Interest on securities" means,
Interest on any security of the Central Government or State Government;
Interest on debentures or other securities for money issued by or on behalf of a local authority or a company or a statutory corporation.
It is chargeable under the head "Income from Other Sources", if it is not chargeable under the head "Profits and Gains of Business or Profession".
On this page:
For Income Tax Purpose, Interest-on-Securities income is computed as under: -
|Interest on Securities||XXX|
|Commission and Brokerage Paid to Bank||XXX|
|Commission and Brokerage Paid to Others||XXX|
|Any other Expenditure||
|Less: - Exempt under section 10(15)||
|Section||Eligible Assessee||Nature of Income|
|10(4)(i)||Non-Resident||Interest on securities or bonds notified by the Central Government before 01-06-2002.|
||Interest on Non-Resident (External) Account.|
|10(4B)||Indian Citizen or person of Indian Origin being a Non-Resident.||Interest on national Savings Certificates notified by Central Government before 01-06-2002, purchased in convertible foreign exchange.|
Income Tax Exemption u/s 10(15)(i) for Interest-on-Securities is available for all assesses for the following incomes.
Income by way of interest, premium on redemption or other payment on such securities, bonds, annuity certificates, other certificates issued by Central Government and deposits as notified by the Central Government;
Deposits notified by Central Government:
12-year National Savings Annuity Certificates
National Defence Gold Bonds, 1980
Special Bearer Bonds, 1991
Post Office National Savings Certificates
Post Office Savings Bank Accounts
Post Office Cumulative Time Deposits Rules, 1981
Treasury Savings Deposit Certificates
Post Office Cash Certificates
National Plan Certificates & National Plan Savings Certificates
Public Account under Post Office Savings Rules upto Rs.5,000.
Scheme of Fixed Deposits governed by the Government Savings Certificates (Fixed Deposits) Rules, 1968.
Scheme of Fixed Deposits governed by the Post Office (Fixed Deposits) Rules, 1968.
Special Deposit Scheme, 1981
Interest on Non-Resident (Non-Repatriable) Rupee Deposit Scheme in the hands of Non-Resident only.
Interest on Resident Foreign Currency Account.
Interest on Resurgent India Bonds issued by State Bank of India.
Exemption u/s 10(15)(ii-b) is available for Individuals & HUFs, for Income received as Interest on Capital Investment Bonds notified before 01.06.2002.
10 year Defence Deposit Certificates
12 year National Defence Certificates
Government of India Defence Certificates
Premium Prize Bonds, 1963
7 year National Savings Certificates (II & III) Issue
Exemption u/s 10(15)(ii-c) is available for Individuals & HUFs, for Income received as Interest on notified Relief Bonds.
10% Relief Bonds
9% Relief Bonds
8.5% Relief Bonds
6.5% Relief Bonds
Exemption u/s 10(15)(ii-d) is available for Interest received by Individuals being a
Non-resident Indian owning the bonds, or
Nominee or survivor to such bonds, or
Person to whom the bonds were gifted.
NRI Bonds 1988,
NRI Bonds II Series.
A scheduled Bank to a non-resident or to a person who is not ordinarily resident on deposits in foreign currency accepted as approved by RBI;
A public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes on any moneys borrowed by it in foreign currency from sources outside India under a loan agreement approved by the Central Government (before 01.06.2003) upto the rate notified.
Notified Bonds and Debentures of any Public Sector Company.
Deposits made by an employee of the Central Government or State Government or a Public Sector Company under a scheme approved by Central Government, out of the moneys due to him on account of his retirement.
|Section||Eligible Assessee||Nature of Income|
|10(15)(iii)||Any assessee||Interest on securities held by the Issue Department of the Central Bank of Ceylon.|
|10(15)(v)||Any assessee||Interest on deposits for the benefit of Bhopal gas leak disaster victims.|
|10(15)(vi)||Any assessee||Interest on Gold Deposit Bonds issued under the Gold Deposit Scheme.|
|10(15)(vii)||Any assessee||Interest on bonds issued by a local authority, which are notified by the Central Government.|
|10(15)(viii)||Any assessee being a non-resident or not-ordinarily resident||Interest received in India on deposits made on or after 01.04.2005 in Offshore Banking Units.|
|10(15)||Any assessee||Certain other interest payable on notified investments in respect of which agreements were entered or loans were borrowed before 01.06.2001.|
Note: Where any interest income is given net of tax deducted at source, it should be grossed up for inclusion.
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