The Reserve Bank of India has, apropos a notification from the Government of India, asked agency banks not to deduct tax at source on either the interest or the maturity proceeds of the 8% Savings (Taxable) Bonds, 2003.

It may be recalled that as per the original scheme for the 8% Savings (Taxable) Bonds, 2003, agency banks were required to deduct tax at source on the interest payable or due and on maturity proceeds of these bonds. The Government of India, in January this year, withdrew this requirement. As such, banks will no longer be required to deduct tax at source on either the interest or the maturity proceeds of the 8% Savings (Taxable) Bonds, 2003.

P. V. Sadanandan
Manager

Press Release : 2003-2004/1201