Is TDS deduction mandatory

Section 194A of the Income Tax Act deals with the provisions relating to deduction of TDS on interest (other than interest on securities).

Any person, other than individual or HUF, who is paying interest (other than interest on securities) to a resident is required to deduct TDS.

Rate of tds is @ 10% and 20 % if PAN not available

TDS is not to be deducted under the following case –

List of interest exempted under Section 194A –

Some of the important lists of interest which is exempted under section 194A are –

• Interest paid to any bank, financial corporation, Life Insurance Corporation Unit Trust of India, any company or a co-operative society engaged in the insurance business.
• Interest paid by a partnership firm to the partners.
• Interest paid by co-operative society to its members.

so TDS deducted is valid

Thank you Mr. Bhaskar

Interest paid to any bank, financial corporation, Life Insurance Corporation Unit Trust of India, any company or a co-operative society engaged in the insurance business.

Here our employer is automobile seller

Another side financiers

Financier released amount by extending finance to a buyer for purchase of commercial vehicle

As purchaser cancelled his buying of commercial vehicle after releasing the payment by financier, the automobile seller posed to refund the finance amount to financier with interest. The interest came more than Rs. 1.00 lac. So, deducted TDS.

So, you are confirming deduction in TDS by the automobile dealer from interest component is CORRECT.

Requesting your confirmation please.