A company pays taxable interest on securities to a resident, and no exception applies. When must tax be deducted under section 393(1) of the Income-tax Act, 2025?
Question and options
A company pays taxable interest on securities to a resident, and no exception applies. When must tax be deducted under section 393(1) of the Income-tax Act, 2025?
At the time of payment
At credit or payment, whichever is later
At the time of credit to the payee's account
At credit or payment, whichever is earlier
Answer and explanation
Correct answer: D - At credit or payment, whichever is earlier
Section 393(1)(c) requires deduction at the time of credit of the income to the payee's account or at the time of payment, whichever is earlier. Payment-only timing is the rule for salary under section 392(1), not for interest on securities.
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