What is the rate of interest on the Non-Convertible Debentures (NCDs)?
The rate of Interest on the NCDs is 7 % p.a. on the amount outstanding on the NCDs on the last day of the calender quarter.
Is the interest receivable on the NCDs taxable?
Yes, it is taxable in the hands of the holder.
What is the rate at which tax will be deducted?
1.Tax @ 10% will be deducted, where the interest payment exceeds Rs.2,500 p.a.
2.Tax @ 20% will be deducted, where the interest payment exceeds Rs.2,500 p.a. and if the payee does not furnish his / her PAN details.
When will the interest be paid?
Interest will be paid quarterly to all the Debenture Holders whose names appear on the Register of Debenture Holders of the Company as on the Record Date, fixed by the Company.
In respect of the NCDs held in electronic form, interest will be paid to the debenture holders whose names appear as the benefial owners as on the Record Date fixed by the Company, as per the details furnished by National Securities Depository Limited and Central Depository Services (India) Limited, for this purpose.
When will the tax be deducted?
Tax will be deducted at the time of credit or payment, whichever is earlier.
Is there any ceiling?
For a resident individual, if the aggregate amount of such interest paid or likely to be paid during the financial year by the Company does not exceed Rs.2,500/-, than no tax shall be deducted at source.
What procedure is to be followed if one does not want his / her tax to be deducted?
As per section 197A of the Income Tax Act, 1961, no deduction of tax shall be made in the case of an individual or a person (not being a company or a firm) if:
Such a person furnishes a declaration, in duplicate, in prescribed Form No. 15G, duly signed.
In case of Senior citizens above 60 years of age effective April, 2011, declaration in prescribed Form No. 15H has to be furnished, in duplicate and duly signed.
Is one supposed to submit the aforesaid forms for each financial year?
Yes, as per Income Tax Act, 1961,one is required to submit the aforesaid forms to the Company for each financial year i.e. FY 2010-11, FY 2011-12 and FY 2012-13
When shall the Form be submitted to the Company by the payee?
The Form must be submitted to the Company by the payee, 7 days before the interest payment date.