10 May 2011
Kindly provide me information regarding TDS on Interest paid to above two banks on Term Loan (Loan against Property) by a Proprietor concern under Audit. Is section 194 A applicable or section 195 applicable
10 May 2011
As per section 194A(3)(iii) no tax is to be deducted where interest is paid to a banking co to thich banking regulation act applies since these banks are governed by the said Act hence no tax is to be deducted However please take care that loan is not taken from their NDFC arm in that case tax would have to be deducted
10 May 2011
The TDS is deductible u/s 195 in case of interest payment to Standard chartered and Deutsche bank as the status of these banks in India is of non-resident.
However enquire from these banks ,as normally they obtain NIL TDS or TDS deduction at lower rate certificate from ITO.
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