The Central Board of Direct Taxes ( CBDT ) has clarified that, no TDS on Interest from Bank Deposit for Scheduled Tribe Category.
The CBDT in the exercise of the powers conferred by sub-section(1F) of section 197A of the Income Tax Act, 1961 notified that no deduction of tax shall be made on the following payment under section 194A of the Act, namely payment in the nature of interest, other than interest on securities, made by a Scheduled Bank (hereinafter the ‘payer’) located in a specified area to a member of Scheduled Tribe (hereinafter the ‘receiver’) residing in any specified area as referred to in s.10(26) of the Act, subject to the following conditions:
For the purposes of the said notification, ‘Scheduled Bank’ means a bank included in the Second Schedule of the Reserve Bank of India Act,1934.