TDS on interest on partner's capital

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This query is : Resolved

VISHRUT (Querist)

08 June 2009 Whether TDS is charged on interest on partner's capital?
- If it is so than please provide with its reference to any case law or circular/Notification.
- And if it is not so than please provide with its reference to any case law or circular/Notification

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

08 June 2009 No need to deduct tax vide section 194A(3)(iv)of the Income tax Act,1961.

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Ratan Sharma

Ratan Sharma (Expert)

08 June 2009 Agreed

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

08 June 2009 Tax at source is not deductible on Intt on Partner's Capital.

Sumit gupta

Sumit gupta (Expert)

08 June 2009 As per section 194A(3)(iv) interest income credited or paid by firm to a partner of the firm is not subject to TDS.
SINCE IT IS EXEMPT IN HANDS OF PARTNER.

Radheyshyam Falod

Radheyshyam Falod (Expert)

08 June 2009 Tax at source is not deductible on Intt on Partner's Capital as per section 194A(3)(iv). But the same is taxable in the hands of the partner. What sumit gupta has said is wrong. It is taxable under the head business income in the hands of the partner.

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