Section 193 - TDS on Interest on Floating Rate Bonds (w.e.f. 01.10.2024)
## Section 193 — TDS on Interest on Government Securities (Amendment)
### Recent Amendment (w.e.f. 01.10.2024)
TDS is to be deducted on interest payable on:
Floating Rate Savings Bonds, 2020 (Taxable), OR
Any other notified security of Central Government / State Government
### Threshold
→ TDS applicable if such interest payable EXCEEDS ₹10,000 during the financial year.
### Significance
Previously, interest on such government bonds was generally outside the TDS net. The amendment plugs this gap and ensures advance collection of tax on these widely-held bonds.
Worked example
### Example 1
Example 1:
Mr. P holds Floating Rate Savings Bonds, 2020 and receives interest of ₹15,000 during FY 2025-26.
Mr. Q receives interest of ₹8,000 on the same bonds.
Analysis: Below ₹10,000 threshold → No TDS.
⚠️ Common exam mistakes
Continuing to treat Floating Rate Savings Bonds 2020 as TDS-exempt — the amendment applied from 01.10.2024.
Using ₹40,000 (194A bank interest limit) instead of ₹10,000 for government bonds.
Forgetting that the threshold is checked for the entire financial year, not per coupon payment.
Bare-Act text Section 193 · Income-tax Act, 1961 · click to expand
With effect from 1.10.2024, TDS is to be deducted on interest payable on Floating Rate Savings Bonds, 2020 (Taxable), or any other notified security of CG/SG if such interest payable exceeds Rs. 10,000 during the financial year.