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Tds on interest paid to banks & other institutions (Income Tax)

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This query is : Resolved


( Author )
17 August 2011

Dear Experts,
My company has taken loan from various Banks & Financial Institutions.
Q1) Whether I am required to deduct the TDS and pay the Interest to these Banks & Financial Institutions?

Q2) If the answer to above is Yes, then whether it is applicable to both Sechedule & Unschedule banks?


CA Navin Jain

( Expert )
17 August 2011

Q1- No, TDS WOULD BE DEDUCTED
Q-2- No NEED TO DEDUCT TDS IF INTEREST HAS PAID TO EITHER OF SCHEDULE OR UNSCHEDULE BANK


RAM HARIT

( Author )
17 August 2011

thanks for immediate response....


Aditya Maheshwari

( Expert )
17 August 2011

why is the query open then.


CA. Aryendra

( Expert )
17 August 2011

Interest on loan is covered to TDS u/s 194A of the Income tax Act. However, as per Sec.194A(3)(iii), interest paid to any banking company to which Banking Regulation Act, 1949 applies is not subject to tax deduction. Thus, any interest on car loan obtained from banks are not subject to TDS.


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