TDS on Interest on Securities

This query is : Resolved

Narendran (Querist)
Follow

10 July 2007 Sir,
whether a firm can issue "deposits" ? If not, Whether it is possible to issue among the Partner's friends and relatives? if so, what is the TDS procedure? whether it come under 193 or 194A?

SHIV KUMAR GUPTA

SHIV KUMAR GUPTA (Expert)
Follow

10 July 2007 Firm can not issue deposits at all.
s.k.gupta

Shashi Mohan Jha

Shashi Mohan Jha (Expert)
Follow

11 July 2007 A firm can procure money from Partner's friends and relatives but why to name it a "Deposit". Deposit is a term used by companies act...not applicable on firms.

In this case it is a simple loan and TDS would be attracted on interest paid to the depositors.