16 January 2008
WHAT IS KMC?IS IT KARNATAK MUNCIPAL CORPORATION? UNDER CIRCULAR NO 699 DT.30-01-1995,IN THE CASE OF LOCAL AUTHORITIES,AND STATUTORY AUTHORITIES,REFERRED TO IN SEC. 10(20A/10(20),THERE WILL BE NO REQUIREMENT TO DEDUCT TAX AT SOURCE FROM INCOME BY WAY OF RENT IF THE PERSON RESPONSIBLE FOR PAYING IS SATISFIED ABOUT THE TAX EXEMPT STATUS UNDER CLAUSE (20) AND (20A)OF SECTION 10 ON THE BASIS OF A CERTIFICATE TO THIS EFFECT GIVEN BY THE SAID AUTHORITIES . IF THE PAYEE IS GOVT. OR LOCAL AUTHORITY ,AND IF THE PAYMENT IS OF RENT ,THERE IS NO NEED TO DEDUCT TDS IF THE PAYER IS SATISFIED AS ABOVE. UNDER SECTION 196,NO TAX IS REQUIRED TO BE DEDUCTED AT SOURCE FROM ANY SUM PAYABLE TO GOVT.,OR RBI OR A CORPORATION ESTABLISHED BY OR UNDER A CENTRAL ACT WHICH IS UNDER ANY LAW EXEMPT FROM TAX ON ITS INCOME IF SUCH SUM PAYABLE IS BY WAY OF INTEREST OR DIVIDEND IN RESPECT OF ANY SHARES OR SECURITIES OWNED BY IT OR IN WHICH IT HAS FULL BENEFICIAL INTEREST OR ANY OTHER INCOME ACCRUING OR ARISING TO IT. R.V.RAO
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