Applicable TDS Sections as per Income Tax Act, 1961:

1. Section 194LB – Income by way of interest from infrastructure debt fund.
2. Section 194LC – Income by way of interest from Indian company.
3. Section 195-TDS – Other Sums

1. Section 194LB – Income by way of interest from infrastructure debt fund.

Payments to

• Non-Residents or
• Foreign Company

Nature of Payment

• Income by way of interest by an infrastructure debt fund referred to in clause (47) of section 10.

Time of Deduction of TDS

• At the time of credit of such income to the account of the payee or
• At the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode

Whichever is earlier

The person responsible for making the payment shall deduct income-tax thereon at the rate of 5%.

2. Section 194LC – Income by way of interest from Indian company.

Payments

• To Non-Residents or
• To Foreign Company by a Indian company or a business trust

Nature of Payment

Interest payable by Indian company or the business trust:

(i) In respect of monies borrowed by it in foreign currency from a source outside India,—

1. Under a loan agreement at any time on or after the 1st day of July, 2012 but before the 1st day of July, 2020; or
2. By way of issue of long-term infrastructure bonds at any time on or after the 1st day of July, 2012 but before the 1st day of October, 2014; or
3. By way of issue of any long-term bond including long-term infrastructure bond at any time on or after the 1st day of October, 2014 but before the 1st day of July, 2020,
4. As approved by the Central Government in this behalf; or

(ia) In respect of monies borrowed by it from a source outside India by way of issue of rupee denominated bond before the 1st day of July, 2020, and

 (ii) To the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan or the bond and its repayment.

Time of Deduction of TDS

• At the time of credit of such income to the account of the payee or
• At the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode

Whichever is earlier

The person responsible for making the payment shall deduct income-tax thereon at the rate of 5%.

3. Applicability of Section 195-TDS on Other Sums

Payments to

• Non-Residents or
• Foreign Company

Nature/type of Payments

• Any Interest, not being an interest referred to in section 194LBor section 194LC.
• Interest referred to section 194LD.
• Any other sum chargeable under the provisions of this Act (not being income chargeable under the head “Salaries” as it is already covered under section 192 of Income Tax Act, 1961) 

Time of Deduction of TDS

• At the time of credit of such income to the account of the payee or
• At the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode

Whichever is earlier, deduct income-tax thereon at the rates in force.