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Tds on interest paid to india bulls(very urgent)

Naina Rawat (Article) (135 Points)

29 April 2016

We are having a loan and we had paid interest amount of RS.106000 during the year, Please suggest whether we had to deduct TDS on it or not , or what will happen if we will not deduct the same.

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9 Replies

CA PRASAD KSHIRSAGAR (CA Practice ) (148 Points)
Replied 29 April 2016

The instant case is falling under section 194A of income tax act.It is necessary to deduct the TDS at the rate of 10% before making payment of interest. We have to fill the quarterly TDS return and also make sure that we upload the return on time. Subsequently, it is also necessary to make sure about the form no 16A the TDS certificate to be issued to the party from whom we have taken the loan.

Please check whether you have TAN number and then proceed with the process of deducting TDS and making rightful payment of the same.

Thank you.

CA Prasad Kshirsagar

ANKUR (ARTICLE) (44 Points)
Replied 29 April 2016

can you liab for beduct TDS if yes is necessary to deduct tax . If not then penalty can be levied on you.

CA MANISH SAXENA (Partner) (561 Points)
Replied 29 April 2016

Hi Naina,

Please let me know in your query WE includes what???? is it Indvidual of Company or Else?

sunny (TAXATION) (50 Points)
Replied 01 May 2016

It attracts section 194A as you are making payment to Non Banking Financial Co. (NBFC) and if it is a company than you have to deduct TDS..first of all you have to pay the entire Interest amount without deducting TDS and than u have to separately deposit Tds , file TDS return, Give form 16A to India bulls and say for refund for this TDS amount..its simple..

1 Like

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 03 May 2016

YES TDS is required to be deducted on interest paid to NBFCs u/s 194A of the income tax act.

Who is liable to deduct TDS on Interest paid to NBFCs ?

Proprietary / HUF concern whose accounts were audited in the financial year proceeding from when the interest is paid to the NBFC.
A Partnership Firm or Pvt. Ltd company irrespective whether the accounts were / would be audited or not.
If the interest paid by the entities mentioned above points A & B is above Rs.5000/-

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 03 May 2016

Consequences if TDS is not done : 30% of expenditure made towards repayment of loan can be disallowed u/s 40(a)(ia). Also, TDS Assessing Officer can raise a demand u/s 201(1) of the income tax Act, 1961 and asked to pay the amount equivalent to TDS deductible on interest paid and interest thereof from your own sources. Therefore, TDS should be properly deducted on interest paid to the NBFCs.

Naina Rawat (Article) (135 Points)
Replied 03 May 2016

Manish sir , its individual and please let me know how can we save ourself from this if we dont want to deduct TDS.

Naina Rawat (Article) (135 Points)
Replied 03 May 2016

THANK YOU EVERYONE

CA MANISH SAXENA (Partner) (561 Points)
Replied 03 May 2016

HI Naina,

All above are correct but the provisions of section 194A shall be applicable to individuals/HUFs, whose total sales, turnover or gross receipts from the business/profession carried on by him/her exceed the monetary limits specified u/s 44AB during the financial year (FY) immediately preceding the FY in which the income is to be credited/paid. Monetary limit (at present) in case of business is turnover of Rs.1 crore and in case of profession, gross receipts of Rs.25 lacs.

Hence i believe you would not be required to dedcut the TDS.

Further you may write me at m10manish @ gmail.com

Thanks!