Provision of interest and deduction of tds
This query is : Resolved
CA Shraddha Vora
(Querist)
10 August 2013
Brief Facts: -
A listed company has been declared as a “Non Performing Asset” (NPA), by a Financial Institution (FI), due to absence of timely payments to them because of shortage of funds.
NPA:-
An asset is Non Performing, when Interest and / or installment of principal remain overdue for a period of more than 90 days with effect from March 31, 2004, as per RBI Master circular.
Query:-
Since the account of the company has been declared as NPA, interest is booked by the FI on receipt basis (and not on accrual basis). However, the company has to provide for interest in the books of accounts on accrual basis.
The question is regarding deduction of TDS, while providing the interest expense.
1) Should the interest be provided for in the books?
2) If provided, should TDS be deducted on the same?
-Nidhi
A listed company has been declared as a “Non Performing Asset” (NPA), by a Financial Institution (FI), due to absence of timely payments to them because of shortage of funds.
NPA:-
An asset is Non Performing, when Interest and / or installment of principal remain overdue for a period of more than 90 days with effect from March 31, 2004, as per RBI Master circular.
Query:-
Since the account of the company has been declared as NPA, interest is booked by the FI on receipt basis (and not on accrual basis). However, the company has to provide for interest in the books of accounts on accrual basis.
The question is regarding deduction of TDS, while providing the interest expense.
1) Should the interest be provided for in the books?
2) If provided, should TDS be deducted on the same?
-Nidhi
10 August 2013
IT HAS TO BE PROVIDED ON RECEIPT BASIS AS IT IS DECLARED AS NPA.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Late Filing Fee Waiver for Q1 Form 144 (Earlier 27Q) – Transition to Income-tax Act, 2025
- Employee secondment
- GSTR9 Annual Return
- Ito add credit side of bank
- Rent agreement of House of deceased person
- IMS (import of goods) ITC related
- Form 144 TDS Return Validation error
- Positive Balance in RCM Liability/ITC Statement – Commercial Rent RCM – Guidance Required
- Capital Gains Tax on Inherited Mutual Fund
- Form 144 TDS Return Validation Error – Mandatory Fields
- Import of Capital Machine
- Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
