Tax payable on Loan provided by Holding Company
This query is : Resolved
Vijay Kumar
(Querist)
24 February 2011
Dear Expert,
If the Holding company lends a loan to Subsidiary company and Subsidiary company pays interest to the Holding company. What kind of tax will be involved under which section it applies and what is the rate of Tax
Please do needful.
Thanks & regards,
Vijay
If the Holding company lends a loan to Subsidiary company and Subsidiary company pays interest to the Holding company. What kind of tax will be involved under which section it applies and what is the rate of Tax
Please do needful.
Thanks & regards,
Vijay
CA PARAS BAFNA
(Expert)
24 February 2011
It will be "Interest other than Interest on Securities". The Interest paying company has to deduct TDS @ 10% in respect of Interest payable to the holding Company in case interest amount exceeds Rs 5000/-. Section 194A will be applicable in this case.
Vijay Kumar
(Querist)
25 February 2011
Dear Expert,
Thank you for providing information. I have for got to specify that here that Holding Company is a Foreign Company - Mauritius Country and Subsidiary Company is an Indian Company.
Now could you please provide your advice on Tax part involved on Interest payment on Loan by Subsidiary Company to Holding Company.
Thanks and regards,
V B Vijay Kumar.
Thank you for providing information. I have for got to specify that here that Holding Company is a Foreign Company - Mauritius Country and Subsidiary Company is an Indian Company.
Now could you please provide your advice on Tax part involved on Interest payment on Loan by Subsidiary Company to Holding Company.
Thanks and regards,
V B Vijay Kumar.
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