44AB

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A business owner undergoing their first audit under Section 44AB for AY 2020-21 is seeking advice regarding TDS obligations. They have been paying interest on a personal loan taken prior to commencing their business, and previously, no TDS was deducted as the loan wasn't for business purposes. The query is whether TDS needs to be deducted on this interest payment now that they are subject to the audit.

swasti

swasti (Querist)
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09 June 2020 Mr. X has earned professional income and getting his accounts audited u/s 44AB for the first time for AY 2020-21.

He had taken unsecured loan long back in his personal capacity and not for business / profession and paying interest on which no TDS was deducted as was not falling u/s 44AB previously. Does he need to deduct tax on personal loan or not? Please guide.