TDS on Interest
This query is : Resolved
21 April 2010
Whether TDS is liable to be deducted on Interest paid on Foreign Currency loans taken from Foreign Banks?
Since as per sec 194A (3)(iii) / (vii) TDS is not required to be deducted on incomes credited or paid to Banking company.
Since as per sec 194A (3)(iii) / (vii) TDS is not required to be deducted on incomes credited or paid to Banking company.
21 April 2010
No deduction in certain cases: No tax is to be deducted at source in the following cases:
a.If the amount is paid or credited to:
I.A banking company to which the Banking Regulation Act 1949 applies.
II. Any financial corporation established by or under any Central, State or Provincial Act.
III. A co-operative society carrying on banking business.
IV.The Life Insurance Corporation of India.
V.The Unit Trust of India.
VI.Any company or co-operative society carrying on the business of insurance.
VII. Such other institutions that the Central Government may notify on this behalf.
b.Interest paid or credited by a partnership firm to its partners.
c.Interest paid by a co-operative society to its members or to another co-operative society.
d.Interest on deposits other than time deposits maintained with a banking company to which the Banking Regulation Act 1949 applies.
e.Interest on deposits with a primary agricultural credit society or a primary credit society or a co-operative land mortgage bank or a co-operative land development bank.
f.Interest on deposits other than time deposits maintained with a co-operative society carrying on banking business. (Other than the societies mentioned above).
g.Interest paid or credited by the Central Government under any provision of the Indian Income Tax Act, Wealth Tax Act, etc.
h.Interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid during the financial year does not exceed fifty thousand rupees.
i.Interest paid or credited by an infrastructure capital company or infrastructure capital fund or a public sector company in relation to a zero coupon bond issued on or after the 1st day of June, 2005 by such company or fund or public sector company.
a.If the amount is paid or credited to:
I.A banking company to which the Banking Regulation Act 1949 applies.
II. Any financial corporation established by or under any Central, State or Provincial Act.
III. A co-operative society carrying on banking business.
IV.The Life Insurance Corporation of India.
V.The Unit Trust of India.
VI.Any company or co-operative society carrying on the business of insurance.
VII. Such other institutions that the Central Government may notify on this behalf.
b.Interest paid or credited by a partnership firm to its partners.
c.Interest paid by a co-operative society to its members or to another co-operative society.
d.Interest on deposits other than time deposits maintained with a banking company to which the Banking Regulation Act 1949 applies.
e.Interest on deposits with a primary agricultural credit society or a primary credit society or a co-operative land mortgage bank or a co-operative land development bank.
f.Interest on deposits other than time deposits maintained with a co-operative society carrying on banking business. (Other than the societies mentioned above).
g.Interest paid or credited by the Central Government under any provision of the Indian Income Tax Act, Wealth Tax Act, etc.
h.Interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid during the financial year does not exceed fifty thousand rupees.
i.Interest paid or credited by an infrastructure capital company or infrastructure capital fund or a public sector company in relation to a zero coupon bond issued on or after the 1st day of June, 2005 by such company or fund or public sector company.
21 April 2010
Hi Sanjay,
You have provided the text of sec. 194A(3)
But that doesn't answer my query.
You have provided the text of sec. 194A(3)
But that doesn't answer my query.
21 April 2010
TDS REQUIRED TO BE DEDUCTED U/S 195.
"banking company to which the Banking Regulation Act 1949 applies" IS CRUCIAL.
ITS MY VIEW. OPINION OF OTHER EXPERTS SOLICITED.
"banking company to which the Banking Regulation Act 1949 applies" IS CRUCIAL.
ITS MY VIEW. OPINION OF OTHER EXPERTS SOLICITED.
21 April 2010
dear rachit,
plese note that the provision of section 194A are applicble on payments to residents only and not on non residents.
you are suppose to deduct tax u/s 195, please check the rate mention in article -11 of DTAA with india and payee resident country.
plese note that the provision of section 194A are applicble on payments to residents only and not on non residents.
you are suppose to deduct tax u/s 195, please check the rate mention in article -11 of DTAA with india and payee resident country.
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