TDS

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2011 proprietorship concern including it's individual under interest incurred more than 5000/- TDS will be deducted or not for the A.Y.2011-12.

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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29 April 2011 kya aap sawaal hindi mai bata sakte hai ?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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27 July 2025 For a **proprietorship concern**, the key point is:

* **Interest paid by a proprietorship (including individual proprietors) on borrowed capital exceeding Rs. 5,000** during the financial year is subject to TDS under **Section 194A** of the Income Tax Act.

### Details:

* **Section 194A** applies to interest other than interest on securities.
* If the proprietorship pays interest exceeding Rs. 5,000 in a financial year to a resident (like on a loan taken from a bank, financial institution, or any person), TDS must be deducted.
* The **applicable TDS rate** is generally **10%** (subject to conditions or lower rates under DTAA).
* This applies for **Assessment Year 2011-12** as well.

### Summary:

| Payment Type | Threshold | TDS Deductible? | Section |
| ---------------------------------------------- | --------- | --------------- | ------- |
| Interest by Proprietorship on borrowed capital | Rs. 5,000 | Yes | 194A |

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**So, yes**, for AY 2011-12, if the proprietorship concern pays interest over Rs. 5,000, TDS is applicable.

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If you want, I can share the exact legal text or any recent updates relevant to this. Let me know!

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