04 October 2014
I am filing quarterly eTDS return (of Bank branch)Q2 FY 2014-15. In RPU What is the section under which interest paid to NRI will be claasified.?
Explanation: Rate of TDS on payment of interest or other sum chargeable to Income Tax to non resident or foreign company not being company has to deduct income-tax thereon at the rates in force. Person has to deduct the TDS at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode. Where any interest or other sum as aforesaid is credited to any account, whether called “Interest payable account” or “Suspense account” or by any other name, in the books of account of the person liable to pay such income then also person has to deposit the TDS on such amount.
Following payment to non resident are not covered under section 195 of Income Tax Act:-
a) Salary Payment to Non Resident b) Payment of dividend as referred to in section 115O and
c) Payment of interest on Loan take in foreign curreny after 1st July 2012 underunder a loan agreementor by by way of issue of long-term infrastructure bonds covered under section 194LC and Payment of interest to NRI on infrastructure debt fund under section 194LB of income tax act. In these case TDS rate on interest payment will be 5%.
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