Tds on interest paid to banks & other institutions

This query is : Resolved

RAM HARIT (Querist)
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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?

CA Navin Jain

CA Navin Jain (Expert)
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17 August 2011 Q1- No, TDS WOULD BE DEDUCTED
Q-2- No NEED TO DEDUCT TDS IF INTEREST HAS PAID TO EITHER OF SCHEDULE OR UNSCHEDULE BANK

RAM HARIT

RAM HARIT (Querist)
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17 August 2011 thanks for immediate response....

Aditya Maheshwari

Aditya Maheshwari (Expert)
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17 August 2011 why is the query open then.

CA. Aryendra

CA. Aryendra (Expert)
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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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