TDS on interest from partner (last year in audit) to firm
This query is : Resolved
19 March 2008
Dear Members
Please guide me in the following matter
The books of account of assessee named ‘A’ (Individual) were under audit u/s 44AB in ASST YR 2006-07. He was also partner in a firm say ‘B’ and his account in the firm was overdrawn during ASST yr. 2007-08 and ‘A’ paid interest Rs. 1,30,000/- to the firm ‘B’.
So, my query is whether ‘A’ is liable to deduct Tax at source on the interest payment to the firm in which he is also a partner? And if ‘A’ has not deducted tax at source then the interest amount is liable to disallowance as expenses?
Please guide….
Please guide me in the following matter
The books of account of assessee named ‘A’ (Individual) were under audit u/s 44AB in ASST YR 2006-07. He was also partner in a firm say ‘B’ and his account in the firm was overdrawn during ASST yr. 2007-08 and ‘A’ paid interest Rs. 1,30,000/- to the firm ‘B’.
So, my query is whether ‘A’ is liable to deduct Tax at source on the interest payment to the firm in which he is also a partner? And if ‘A’ has not deducted tax at source then the interest amount is liable to disallowance as expenses?
Please guide….
19 March 2008
if interest is debited in your a/c in the firms books and also you will intraduce
your capital in the firm rs 130000/- and you will pay interest to firm then tds provision is not applicable to you
your capital in the firm rs 130000/- and you will pay interest to firm then tds provision is not applicable to you
19 March 2008
TDS is to be made by an individual on interst paid if his accounts were under audit u/s 44AB in the last year .
However a partnership firm is not required to make TDS on interest paid to partner u/s 194A(3)(iv) which exempts from TDS "to such income credited or paid by a firm to a partner of the firm "
AS SUCH INTEREST PAID BY PARTNER TO THE FIRM IS NOT EXEMPTED FROM TDS IN YOUR CASE
However a partnership firm is not required to make TDS on interest paid to partner u/s 194A(3)(iv) which exempts from TDS "to such income credited or paid by a firm to a partner of the firm "
AS SUCH INTEREST PAID BY PARTNER TO THE FIRM IS NOT EXEMPTED FROM TDS IN YOUR CASE
19 March 2008
YES MR A IS LIABLE TO DEDUCT TDS ON INT. PAID TO THE FIRM.
R.V.RAO
R.V.RAO
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