The Centre has relaxed the provisions of Income-Tax Act, 1961 Act in relation to the payment of interest regarding TDS by Scheduled Bank to a member of Scheduled Tribe (ST) community on Friday. 

In a notification on Friday, the ministry said that “no deduction of tax shall be made on the following payment under section 194A of the said Act, namely payment in the nature of interest, other than interest on securities, made by a scheduled bank located in a specified area, to a member of Scheduled Tribe residing in any specified area, as referred to in clause (26) of section 10 of the said Act.”

In the order, the finance ministry said, “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. 

“The order read, “The payer satisfies itself that the receiver is a member of Scheduled Tribe residing in any specified area, and the payment as referred above is accruing or arising to the receiver as referred to in section 10(26) of the Act, during the previous year relevant for the assessment year in which the payment is made, by obtaining necessary documentary evidences in support of the same. 

The bank will have to report such payment in the statements of deduction of tax, in accordance to the relevant provisions of the Income-tax Act. The payment made or aggregate of payments made during the previous year should be ₹20 lakh or less.

In a separate order, the Finance Ministry extended the deadline for linking Aadhaar with Permanent Account Number (PAN) by six months to March 31, 2022. The time limit for this was scheduled to end on September 30, 2021. The due date for completion of penalty proceedings has also been extended by six months to March 31, 2022.