TDS - EMI INTEREST

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This discussion clarifies whether Tax Deducted at Source (TDS) is applicable to the interest component of EMIs paid on loans taken by a company. The consensus is that TDS is indeed applicable to the interest portion. Even though EMIs are automatically deducted, it's possible to set up automatic TDS deductions or arrange for the finance company to refund any incorrectly deducted TDS.

ANJANI KUMAR

ANJANI KUMAR (Querist)
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07 January 2021 Dear Sir/madam,

I have taken loan from MAGMA HOUSING FINANCE in my Company's name. Every month EMI is deducting from my company's account. My question is whether tds applicable for Interest?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 January 2021 Yes, TDS applicable on the interst payment.

ANJANI KUMAR

ANJANI KUMAR (Querist)
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07 January 2021 How sir? Every month is deducting EMI. How will you deduct TDS on Interest? Because its automatically deduct emi. How is it possible. Can you explain .

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 January 2021 Set automatic deduction of TDS also. If not possible ask the finance company to pay back TDS.

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