Whether TDS is liable to be deducted on Interest paid on Foreign Currency loans taken from Foreign Banks?
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Interest on Foreign Currency Loans
Replies (3)
Dear Rachit,
Plz see the below TDS Rate for your kind reference.
Form 27Q:
|
Section |
Nature of Payment |
Status |
Tax (%) |
| 194E | Payment to nonresident sportsmen or sports association | 10 | |
| 195(a) | Income from foreign exchange assets payable to an Indian citizen | 20 | |
| 195(b) | Income by way of long-term capital gain referred to in sec. 115E | 10 | |
| 195(c) | Income by way of Short-term capital gains u/s. 111A | 15 | |
| 195(d) | Income from other long-term capital gains | 20 | |
| 195(e) | Income by way of interest payable by Government/Indian concern on money borrowed or debt incurred by Government or Indian concern in foreign currency | 20 | |
| 195(f) | Royalty payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern after March 31, 1976, where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to section 115A(1A) to the Indian concern or in respect of computer software referred to in the second proviso to section 115(1A), to a person resident in India - | ||
| 1.Where the agreement is made before June 1, 1997 | 30 | ||
| 2.Where the agreement is made after May 31, 1997 but before June 1, 2005 | 20 | ||
| 3.Where the agreement is made on or after June 1, 2005 | 10 | ||
| 195(g) | Royalty (not being royalty of the nature referred to in (e) sub para) payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern and where such agreement is withan Indian concern, the agreement is approved by the Central Government or where it relates to matter included in the industrial policy, the agreement is in accordance with that policy | ||
| 1.Where the agreement is made after March 31, 1961 but before April 1, 1976 | COMPANY | 50 | |
| OTHERS | 30 | ||
| 2.Where the agreement is made after March 31, 1976 but before June 1, 1997 | 30 | ||
| 3.Where the agreement is made after May 31, 1997 but before June 1, 1997 | 20 | ||
| 4.Where the agreement is made on or after June 1, 2005 | 10 | ||
| 195(h) | Fee for technical services payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern and where such agreement is withan Indian concern, the agreement is approved by the Central Government or where it relates to matter included in the industrial policy, the agreement is in accordance with the policy - | ||
| 1.Where the agreement is made after February 29, 1964 but before April 1, 1976 | COMPANY | 50 | |
| OTHERS | 30 | ||
| 2.Where the agreement is made after March 31, 1976 but before June 1, 1997 | 30 | ||
| 3.Where the agreement is made after May 31, 1997 but before June 1, 2005 | 20 | ||
| 4.Where the agreement is made on or after June 1, 2005 | 10 | ||
| 195(i) | Any other income | COMPANY | 40 |
| OTHERS | 30 | ||
| 196A | Income in respect of Units of Non-residents | 20 | |
| 196B | Income and Long-term Capital gain from units of an Off shore fund | 10 | |
| 196C | Income and Long-term Capital Gain from Foreign Currency Bonds or shares of indian companies | 10 | |
| 196D | Income of Foreign Institutional Investors for Securities | 20 | |
| Surcharge ( On Tax) | Applicable for Foreign Companies if payment/credit exceeds Rs.1 crore of such companies | 2.5 | |
| Education Cess | on Tax deducted Plus Surcharge | 3 | |
regards,
ratan
Dear Ratan,
Agree that TDS is liable to be deducted u/s. 195(e) on Interest paid on monies borrowed in foreign currency but whether it is also applicable to loans taken from banking company. Whether sec 194A(3)(iii) which exempts TDS deduction in case of interest is paid to banking company to which Banking Regulation Act, 1949 is applicable, also applies to loans taken in foreign currency from foreign banks?
Dear Rachit,
Good question Brother,but I think Banking Regulation Act 1949 does not apply to Foreign Banks....
So TDS will apply, But i m not sure let others reply.........
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