.

CBDT vide Circular No. 23/2015 dated 28-12-2015 [ F.No.279/Misc./140/2015-ITJ ] have clarified that No TDS on interest on FDRs made in the name of the Registrar General of the Court or the depositor of the fund on the directions of the Court till the matter is decided by the Court. However, once the Court decides the ownership of the money lying in the fixed deposit, the provisions of section 194A will apply to the recipient of the income.

It is also mentioned the circular that in the case of UCO Bank in Writ Petition No. 3563 of 2012 (available on NJRS at 2014-LL-1111) and CM No.7517/2012 vide judgment dated 11.11.2014 , the Hon’ble Delhi High Court has held that the provisions of section 194A do not apply to fixed deposits made in the name of Registrar General of the Court on the directions of the Court during the pendency of proceedings before the Court. In such cases, till the Court passes appropriate orders in the matter, it is not known who the beneficiary of the fixed deposits will be. Amount and year of receipt is also unascertainable. The Hon’ble High Court thus held that the person who is ultimately granted the funds would be determined by orders that are passed subsequently. At that stage, undisputedly, tax would be required to be deducted at source to the credit of the recipient. The High Court has also quashed Circular No 8 of 2011.

Download Circular No. 23/2015 dated 28-12-2015 [ F.No.279/Misc./140/2015-ITJ ]


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