Tds deduction on interest on loan



Querist : Anonymous (Querist)
25 June 2014
Dear Sir, myself Savan Kasliwal.

My query is " I have borrowed loan from Non-banking Financial Institute of Rs. 3 crore in Pvt. Ltd. Co." I am paying more than Rs. 4.00 lac per month as an Interest.

Whether any TDS shall be deduct against the interest amount?

If TDS shall be deduct, please answer with valid evidence like under which section of Income Tax Act?

If no then also provide valid legal justification.

Awaiting for your positive and prompt reply.

Please do the needful at the earliest.

With Best Regards,


Savan Kasliwal


Thanks for your positive & prompt reply.

Please provide valid evidence for no deduction of TDS in above query.

Awaiting again your positive & prompt reply.

With Best Regards,


Savan Kasliwal


CA Tejas Mistry (Expert)
25 June 2014
If the Financial Institution is incorporated under the Central/ state/ provisionla act then TDS will not be attracted.
Otherwise TDS need to be deducted u/s 194 A of IT Act,
@ 10%


Querist : Anonymous (Querist)
25 June 2014
Thank you so much for your prompt reply.

But if the Financial Institution is incorporated under Central / State / provisional act then how can we identify whether TDS no need do deduct?

I mean to say is there any thing mentioned i.e. no need to deduct TDS if the Financial Institution is incorporated under Central / State?

CA Tejas Mistry (Expert)
26 June 2014
Yes it is mention under section 194A of IT Act.


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