T.d.s on interest on debentures of a private limited company

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Sir,

Please guide me- whether t.d.s on interest paid/payable on debentures of a private limited company be made

u/s 193 or Sec194A. The company is a NBFC. Currently, it has deducted u/s 194A.

 

 

Replies (2)

Debentures are securities , hence interest should have been deducted u/s 193 and not under 194A

 

 

There is no Tax deduction on interest from debentures if

any interest payable to an individual or a Hindu undivided family, who is resident in India, on any debenture issued by a company in which the public are substantially interested, if—

(a) the amount of interest or, as the case may be, the aggregate amount of such interest paid or likely to be paid on such debenture during the financial year by the company to such individual or Hindu undivided family does not exceed five thousand rupees; and

(b) such interest is paid by the company by an account payee cheque;

 

or

 

any interest payable on any security issued by a company, where such security is in dematerialised form and is listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and the rules made thereunder.

Thank You Sir

 

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