vinayak c. chavan (CPT passed) (1011 Points)
29 December 2014We are pvt ltd compnay. we have repaid loan taken from Directors in Dec 2014 after 9 months. Should we pay interest on loan while making payment of loan or is it ok to pay interest at the end of F.Y. i.e. at March 2015. What is the tds applicability on interest on loan to Directos.
Arif Ali
(Apt Co Advisory)
(1230 Points)
Replied 05 January 2015
It is totally depend on loan agreement thats whats interest rate there mentioned.
Normally interest rate is quarterly calculated. You can take the interest rate of SBI. and it should be entered quarterly and if expeected interest amount is cross the limit of 5000 in a F.Y., then you have to deduct the TDS at the time of crediting the interest amount to director loan. and it will be paid within seven days of following month. if not then 1% (if tds not deducted, as your case), 1.5% (if deducted but not paid) per month will be there.
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