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TDS on Late Payment Interest Charges

This query is : Resolved 

13 July 2011

Hi, we had a contract with our customer to pay the amount before X date else we will charge the Interest @ 20%. if we will assume that the interest on late payment by customer is 2,00,000/-. Is tds appplicable U/S 194A for the same? in this situation there is no service rendered by us??? Is service tax also applicable for the same? Kindly reply with detail. Thanks Naveen Ahlawat

CA Navin Jain (Expert)
13 July 2011

TDS is applicable under sec 194A

but service tax is not applicable

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