Tds on interest on loan (foreign currency)
This query is : Resolved
25 October 2016
Dear Member
My company has taken a loan from bank in foreign currency. Now we want to remit the first EMI including Interest part. So, please let me know the rate of TDS and under which section of the income tax this expenses is covered. Also please let me know DTAA rate as we are remitting the amount to USA. does surcharge applicable if payment is less than 1 Crore in a Financial Year.
My company has taken a loan from bank in foreign currency. Now we want to remit the first EMI including Interest part. So, please let me know the rate of TDS and under which section of the income tax this expenses is covered. Also please let me know DTAA rate as we are remitting the amount to USA. does surcharge applicable if payment is less than 1 Crore in a Financial Year.
Sandeep Dharar
(Expert)
25 October 2016
No TDS is applicable on payment to any financial institution.
27 October 2016
Dear Sandeep,
I know that in India there is no need to deduction TDS on Nationalized Banks. But We're remitting amount to a bank located in Singapore.
I know that in India there is no need to deduction TDS on Nationalized Banks. But We're remitting amount to a bank located in Singapore.
Sandeep Dharar
(Expert)
27 October 2016
Yup, its my mistake, I skip the part to where the currency being remitted. Yup TDS is applicable on the transaction. U may visit the following link(forum page where conversation between our experts are mentioned), to get answers of all ur issues:-
https://www.caclubindia.com/forum/tds-on-interest-to-foreign-bank-182069.asp
https://www.caclubindia.com/forum/tds-on-interest-to-foreign-bank-182069.asp
27 October 2016
Also please let me know under which section the expense shall be covered. Actually Payment made under section 195 but while filing 27Q under which section the expenses should be covered.
28 October 2016
As per India US DTAA rate is 10% (Article 11), subject to availability of No PE, POEM & TRC
"10 per cent of the gross amount of the interest if such interest is paid on a loan granted by a bank carrying on a bona fide banking business or by a similar financial institution "
Relevant Income Tax Section 115A
Please provide additional details about loan to confirm
"10 per cent of the gross amount of the interest if such interest is paid on a loan granted by a bank carrying on a bona fide banking business or by a similar financial institution "
Relevant Income Tax Section 115A
Please provide additional details about loan to confirm
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