17 August 2011
Dear Experts, My company has taken loan from various Banks & Financial Institutions. Q1) Whether I am required to deduct the TDS and pay the Interest to these Banks & Financial Institutions?
Q2) If the answer to above is Yes, then whether it is applicable to both Sechedule & Unschedule banks?
17 August 2011
Interest on loan is covered to TDS u/s 194A of the Income tax Act. However, as per Sec.194A(3)(iii), interest paid to any banking company to which Banking Regulation Act, 1949 applies is not subject to tax deduction. Thus, any interest on car loan obtained from banks are not subject to TDS.
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