TDS on Interest paid under Cross Currency Swap
This query is : Resolved
CA Alpesh Tated
(Querist)
05 February 2011
We have taken a loan in US$ but we wishes to pay in INR, so we have entered into Cross Currency Swap.
Thus, now we have to pay in INR & @ fixed rate of interest in place of USD & @ floating interest rate.
Thus, for last month, we pay interest to our Swap Bank as INR 935000 @fixed rate of interest in place of USD 8000 @ floating rate of interest.
Our Swap Bank receives INR 935000 from us while our Swap bank pays USD 8000 to foreign Bank.
Now, we convert this USD 8000 @ current currency rate i.e 1 USD = INR 45, equivalent 360000.
We deduct the TDS on INR 360000 @ 10 % as per DTAA. (On basis of Form 15 CA & the CA Certificate in Form 15CB)
TDS = 36000.
Now, in our books we are showing Interest as INR 935000 but TDS as INR 36000 effective 3.85%
Whether we are deducting TDS correctly and whether our accounting for cross currency swap is correct.
Also, suggest which amount to show in TDS Return.
Please advise.
Thus, now we have to pay in INR & @ fixed rate of interest in place of USD & @ floating interest rate.
Thus, for last month, we pay interest to our Swap Bank as INR 935000 @fixed rate of interest in place of USD 8000 @ floating rate of interest.
Our Swap Bank receives INR 935000 from us while our Swap bank pays USD 8000 to foreign Bank.
Now, we convert this USD 8000 @ current currency rate i.e 1 USD = INR 45, equivalent 360000.
We deduct the TDS on INR 360000 @ 10 % as per DTAA. (On basis of Form 15 CA & the CA Certificate in Form 15CB)
TDS = 36000.
Now, in our books we are showing Interest as INR 935000 but TDS as INR 36000 effective 3.85%
Whether we are deducting TDS correctly and whether our accounting for cross currency swap is correct.
Also, suggest which amount to show in TDS Return.
Please advise.
CA Alpesh Tated
(Querist)
10 February 2011
Waiting for the valuable suggestions of our esteemed experts........
27 July 2025
https://docs.google.com/document/d/12m_bUMSHvEWcM_ZoOqGDCfyLugC3vt0TlMlor_EMRHM/edit?usp=sharing
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