TDS on Interest ( 194A)

This query is : Resolved

narendra (Querist)
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15 November 2010 Dear friends!

One pvt. ltd company ( A) has taken a loan from another pvt.ltd company ( B), created its FD and pledged with the bank to facilitate overdraf facility to an another private ltd company ( C) ( OD against Third party FD). Both the company ( A & C ) have common directors. Now Company A will pay the interest to B and will deduct the TDS but since this loan is for company C it will seek refund of the same.
My querry is whether Company C will also deducted TDS on payment of interest to Company A.
How can this double TDS be saved?
**This loan can not be arranged by company B to C directly because it was a new & unknown company to B.

thanks & Regards
naren

taxindiaconnect

taxindiaconnect (Expert)
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15 November 2010 Apply for TDS exemption certificate u/s 197 in both the companies, once you get it, no TDS would be required to be deducted.

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