Circular No. 348

What it does

Tells officers that the rates for deducting tax at source from interest on Government securities for the financial year 1982-83, prescribed in the First Schedule to the Finance Act, 1982, are unchanged, so deduction continues at the rates intimated in circular No. 299 dated 24 April 1981. The one qualification is that changes have been made in Sub-Paragraph I of Paragraph A of Part III of the First Schedule, and where those rates apply the deduction must follow the annexed Sub-Paragraph I.

Why it was issued

It is the annual instruction on interest on securities, issued to confirm that the rates in the previous year's circular continue and to circulate the amended Sub-Paragraph I.

Who it reaches

Treasury officers and others paying interest on Government securities in 1982-83
Holders of Government securities, particularly non-residents to whom the Sub-Paragraph I comparison applies
Officers issuing instructions to treasuries

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

FINANCIAL YEAR 1982-83
1722. Instructions for deduction of tax at source from interest on securities during financial year 1982-83 at the rates specified in Part III of First Schedule to Finance Act, 1982
1. I am directed to invite a reference to the Board’s Circular No. 299 [F. No. 275/10/81-IT(B)], dated 24-4-1981, wherein you were requested to issue necessary instructions for making deduction of income-tax at source from "Interest on Government securities" as prescribed in the Finance Bill, 1981.
2. There is no change in the rates of deduction of tax at source from such income to be made for the financial year 1982-83, prescribed in Part II of the First Schedule to the Finance Act, 1982. However, some changes have been made in Sub-Paragraph I of Paragraph A of Part III of the First Schedule to the said Finance Act, 1982. The tax should, therefore, continue to be deducted at source during the financial year 1982-83, at the rates intimated in the Board’s circular referred to in para 1 above except where the rates prescribed in Sub-Paragraph I of Paragraph A of Part III of the First Schedule are applicable. The deduction of tax should be made in accordance with the annexed Sub-Paragraph I, wherever it is applicable.

Circular : No. 348 [F. No. 275/19/82-IT(B)], dated 16-8-1982.

What to watch

The circular carries no rate table of its own; the rates are in circular No. 299 dated 24 April 1981, which must be read with it.
Where Sub-Paragraph I of Paragraph A of Part III applies the amended annexed rates govern, and those did change.
The reference in the text to Part II and to Part III of the First Schedule is not consistent, so the Schedule itself should be checked.
The rates speak only for the financial year 1982-83.

Where you meet it

Only in an old dispute about deduction on Government security interest paid in 1982-83.

← Circular No. 349 · Circular No. 347 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.