Query- Income Tax- Sec 12A

Dear SRRF members,

We have received a new query under Income Tax from Mr. Vidya sagar Devabhaktuni’ President- SKG Sangha

”Being a society registered under section 12A of the Income Tax Act, is the society allowed to keep its funds in a bank fixed deposit?

If yes, is the interest earned on this bank fixed deposit subject to TDS by the bank? If yes is there a way to avoid this TDS?

Looking forward to your response

With warm regards,

Tanvi Dogra

Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
Tele/Fax: +91-11-25821088, 25817157, 25722044
e-mail: socio-research@sma.net.in



This entry was posted in FCRA, TAX, LEGAL. Bookmark the permalink.

3 Responses to Query- Income Tax- Sec 12A

  1. BV Soma Sastry says:

    Dear Friends,

    Section 11(5) of the IT Act prescribes the modes of investments and FD is part of the same. It includes other instruments like MFs, NSC etc. So investment in FD is very much permissible. Bank interest is subject to TDS.

    NGOs have to get permission in the form of 15AA or something. I am not sure.

    Thanks and regards,
    B V Soma Sastry

  2. Anup Khosla says:

    Investment in bank FD is in order. Bank would normally deduct TDS unless you get a specific certificate for non deduction from IT Authorities naming the bank

    Anup Khosla

  3. Ajay Jain says:

    Dear all,

    In my view, We can keep fund as ‘Fixed deposit’ and interest earned can be avoided TDS to be deducted BY Bank. To avoid TDS by Bank, we should apply to Income tax for expectation certificate on Interest income.

    After receiving the exemption certificate from Income tax the same to be sent to bank for NON DEDUCTION OF TDS ALONG WITH 12a CERTIFICATE REGISTERED. Bank will not deduct TDS on interest.


Comments are closed.