Tds

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Sankar Chakraborty (Querist)
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11 January 2012 Dear Experts,

please let me know when a proprietor concern can deduct tds on payment of interest(of unsecured loan 23.00 lac) u/s 194A

(the above concern has TAN to deduct tds)

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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11 January 2012 Firstly, a proprietorship concern is required to deduct TDS only if it was subject to tax audit in the preceeding year.

If the above condition is satisfied, then liability to deduct TDS arises.

TDS u/s 194A is required to be deducted if the amount of interest exceeds Rs. 5,000/-.

However, TDS shall NOT be deducted if the interest is paid to any of the following:

(a) any banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies, or any co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank), or

(b) any financial corporation established by or under a Central, State or Provincial Act, or

(c) the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), or

(d) the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), or

(e) any company or co-operative society carrying on the business of insurance.

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