Section 206A of ITA, 1961 : Section 206A: Furnishing Of Quarterly Return In Respect Of Payment Of Interest To Residents Without Deduction Of Tax

Explanation using Example

Imagine that Mr. Sharma has a fixed deposit with ABC Bank, which earns him an annual interest of INR 9,000. Since the interest amount does not exceed INR 10,000, ABC Bank is not required to deduct tax at source on this interest income. However, under Section 206A of the Income-tax Act, 1961, ABC Bank is still obligated to prepare a statement of the interest paid to Mr. Sharma and submit this information to the income tax authorities. This submission must be done quarterly and in the prescribed electronic format such as on a CD-ROM or other computer readable media.