Tds on interest of tax refund

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Dinesh Sharma (Querist)
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28 May 2012 Our client registered in Sales Tax Deptt. and after assessment of 2009-10 he received Sales Tax Refund Rs. 300000 in the year 2011-12. After some time he received Interest on Sales tax refund Rs. 35000. But the Sales Tax Deptt. deduct TDS on Interest Refund.

Can the govt. liable for Deduct the TDS. If yes Which section considered and what limit of Interest Amount for TDS Liability??

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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29 May 2012 TDS on interest is deducted u/s 194A. The limit is Rs. 10,000 per annum.

Dinesh Sharma

Dinesh Sharma (Querist)
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29 May 2012 Ok

But sir my other client received refund of 2009-10 Rs.65000 in 2011-12 and he received also Interest on Refund about Rs.6300 after deduct TDS. Can applicable Sec.194A

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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29 May 2012 Sorry made a little mistake. Limit of Rs. 10,000 is when interest is received from a bank.

For interest from any other person, the limit is Rs. 5,000.