Sathyanarayanan. CA Final
Article
[ Scorecard : 466]
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Posted On 28 January 2010 at 12:25
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Friends i have two question.
1.A Company Pays interest to creditors for belated payment. The interest paid is more than 10,000. Does the company need to deduct TDS?
2. A company give Letter of credit to a creditor for payment and the creditor discounts it with his bank. It is normal custom that the creditor will claim such discounting charges from company. Now such payments is interest? If yes then whether TDS apllicable?
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CA Pramod Jain
manager finance
[ Scorecard : 871]
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Posted On 28 January 2010 at 12:33
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i have answer for your 1st question it will attract tds
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Amir
Learner
[ Scorecard : 3851]
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Posted On 28 January 2010 at 12:36
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Dear Sathyanarayan,
1) TDS will be attracted & threshold limit is 5,000
2) TDS will not be attracted in this case since it is a kind of reimbursement of expenses incurred by Creitor.
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Sathyanarayanan. CA Final
Article
[ Scorecard : 466]
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Posted On 28 January 2010 at 12:47
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| Originally posted by : Amir |
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Dear Sathyanarayan,
1) TDS will be attracted & threshold limit is 5,000
2) TDS will not be attracted in this case since it is a kind of reimbursement of expenses incurred by Creitor.
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DEAR AMIR,
FOR POINT 2
WHAT KIND OF EXPENDITURE IT IS TO COMPANY?
I AM THINKING IT AS INTEREST FOR CREDIT PERIOD.
PLEASE GIVE YOUR SUGGESSTION.
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Amir
Learner
[ Scorecard : 3851]
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Posted On 28 January 2010 at 12:53
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Dear Sathyanarayan,
Brother these are Bank Charges/Discounting Charges & not "Interest".
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Sathyanarayanan. CA Final
Article
[ Scorecard : 466]
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Posted On 28 January 2010 at 13:05
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Dear Amir
Thank for reply.
In case of LC bank is charging Usance Charges. Actually it is interest charged by party seperately mentioning as interest in seperate invoice. Whether such payment attract TDS.
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Amir
Learner
[ Scorecard : 3851]
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Posted On 28 January 2010 at 13:10
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Dear Sathyanarayan,
Brother the fact will not change (even if it is actually for interest), reimbusements are not subjected to TDS in general.
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sivaram
ACCOUNTS EXECUTIVE
[ Scorecard : 3065]
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Posted On 28 January 2010 at 13:21
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Lovely reply by Mr Amir
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