TDS on chit discount
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 March 2011
I was subscribed to chit fund run by a private limited company. My concern was subject to Tax audit u/s.44AB. In a particular month I was drawn an amount after deducting a certain discount amount and utilized the same for my business. Whether I need to deduct TDS on this amount as it is in the nature of interest payment on borrowings?
Thanks and Regards
R.Krishnaraj
Thanks and Regards
R.Krishnaraj
31 March 2011
The discount on amount disbursed by a chit fund company to the members from their contribution is not `interest’with in the meaning of section 2(28A) of the Income tax Act,1961, therefore, the question of deducting any tax at source therefrom would not arise.
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