TDS/TCS APPLICABILITY

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This query is : Resolved

ACMA Obulirajan R (Querist)

28 April 2009 I am deducting interest on over due outstanding from my customer. Please let me know whether TDS/TCS will be applicable for the same. monthly total interest income may be Rs. 30,000.00 from all the customers. Please exlain.....

Shyam Lal Naik

Shyam Lal Naik (Expert)

28 April 2009 You are charging interest on overdue balance of your customers. TDS get attracted u/s 194A, being interest other than interest on securities.

Assuming your customers are other than co-operative society/bank, they need to deduct TDS, if the amount of interest exceeds Rs. 5,000/-. The rate is 10% + applicable surcharge + 3% cess.

ACMA Obulirajan R

ACMA Obulirajan R (Querist)

28 April 2009 Sir,

Since we are directly debiting interest to their account we have to account the tds part also.

I dont think they will give tds certificate. please suggest me.

Shyam Lal Naik

Shyam Lal Naik (Expert)

28 April 2009 You need to account for TDS only if TDS is deducted bu your customers. You need not suo moto make the adjustment for TDS.

taxindiaconnect

taxindiaconnect (Expert)

28 April 2009 Applicability is TDS arises in the hands of the payer only if the payment made by any payer to you exceeds Rs 5K. Since your debiting to their account, they are liable to make TDS at the time of making credit to your account or payment which ever is earlier. You need not account for TDS at the time of debit, however when the customer credits in your account, the an entry may be paased from interest recoverable to TDS recoverable account.