Withholding tax on profit on debt
Withholding tax on profit on debt [Section 151, Division IA of Part III of the First Schedule]
Persons mentioned in clauses (a) to (d) of sub-section (1) of section 151 are required to deduct tax at the time of payment of profit on debt. The rate of tax was 10% to be deducted at the time the gross amount of the profit is paid to the recipient.
As per Finance Act, 2019, the rate of tax has been increased from 10% to 15%. Hence, from 01 July, 2019, the payers of profit mentioned in sub-section (1) of section 151 are required to deduct tax @ 15% of the gross amount of yield or profit at the time of payment of profit.
However, the rate of tax shall be deducted at 10% in cases where yield or profit paid is Rs.500,000 or less in a tax year.