TDS Provision

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This discussion clarifies whether a private school needs to make TDS provisions when paying interest to an NBFC. Generally, if the school is run by a Society or Trust and the annual interest exceeds £5,000, TDS under Section 194A is applicable. However, interest paid to banks is exempt from TDS. Loans taken from NBFCs are subject to TDS.

VIPIN GUPTA

VIPIN GUPTA (Querist)
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20 March 2021 One of our client is a Private School he is paying Interest to NBFC for loan taken. Will TDS provision no applicable on it.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 March 2021 TDS provisions applicable for such interest payable.

PARAS CHHAJED

PARAS CHHAJED

(Expert)
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21 March 2021 The school must be run and managed by a Society or Trust. It is required to deduct tax u/s 194A if the interest paid or payable in a year exceeds Rs.5,000. If the loan is taken from a Bank then not required to make TDS.