TDS ON INTEREST ON MOBILISATION ADVANCE
This query is : Resolved
16 September 2023
XYZ Ltd. is a private limited company. It has taken mobilisation advance from NPCC Ltd. for the contract awarded. Now NPCC Ltd has charged interest @ 12% p.a. on Mobilisation Advance as per the calculation pre defined in the agreement. The interest is deducted from the running bills alongwith other deductions directly by NPCC Ltd at the time of payment of running bills.
Now the query - Is XYZ Ltd. liable to deduct TDS on interest on mobilisation advance deducted by NPCC Ltd.? If not, please help reference to any case laws or specific provisions of the Act.
Please reply in urgent. Case related to FY 22-23 which is under audit due on 30th Sep, 2023.
Now the query - Is XYZ Ltd. liable to deduct TDS on interest on mobilisation advance deducted by NPCC Ltd.? If not, please help reference to any case laws or specific provisions of the Act.
Please reply in urgent. Case related to FY 22-23 which is under audit due on 30th Sep, 2023.
16 September 2023
TDS applicable, contact NPCC Ltd for tax deduction.
They can give consent for TDS or they have to tell any exemption from TDS.
They can give consent for TDS or they have to tell any exemption from TDS.
16 September 2023
Can Section 196 be applied here?
Interest or dividend or other sums payable to Government, Reserve Bank or certain corporations.
Sec. 196 : Notwithstanding anything contained in the foregoing provisions of this Chapter, no deduction of tax shall be made by any person from any sums payable to—
(i) the Government, or
(ii) the Reserve Bank of India, or
(iii) a corporation established by or under a Central Act which is, under any law for the time being in force, exempt from income-tax on its income, or
(iv) a Mutual Fund specified under clause (23D) of section 10,
where such sums is payable to it by way of interest or dividend in respect of any securities or shares owned by it or in which it has full beneficial interest, or any other income accruing or arising to it.
Interest or dividend or other sums payable to Government, Reserve Bank or certain corporations.
Sec. 196 : Notwithstanding anything contained in the foregoing provisions of this Chapter, no deduction of tax shall be made by any person from any sums payable to—
(i) the Government, or
(ii) the Reserve Bank of India, or
(iii) a corporation established by or under a Central Act which is, under any law for the time being in force, exempt from income-tax on its income, or
(iv) a Mutual Fund specified under clause (23D) of section 10,
where such sums is payable to it by way of interest or dividend in respect of any securities or shares owned by it or in which it has full beneficial interest, or any other income accruing or arising to it.
17 September 2023
Section 196 not applicable for PSU.
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