Tds

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Dear Members,

Whether TDS on Interest paid by NBFC to Others attracts TDS? If Yes, Kindly Justify.

Thanks in advance

Replies (4)

Yes dear, TDS provisions as per sec-194A will be applicable on interest on loan paid to NBFCs (like Housing Development Finance Corporation Limited, Power Finance Corporation Limited, Rural Electrification Corporation Limited, National Bank of Agricultural and Rural Development, Infrastructure Development Finance Company Limited, etc), as they are not covered in the exceptions as per sec-194A(3) & 197(1D). At the time of payment of EMI, it is not possible to deduct TDS & hence as a general practice it is paid from your own pocket at first & after filing tds return & issue of TDS certificate in Form No.16A to NBFC, they will return the TDS amount. Hence, in the books of accounts you need to debit the NBFC for TDS & on receipt of TDS amount, their accounts should be squared up.

Hope ur doubt is cleared now...

It is Interest Paid by NBFC and not to NBFC. For Eg, I am an NBFC. I am paying interest for an deposit. Should I deduct TDS

 

It is Interest Paid by NBFC and not to NBFC. For Eg, I am an NBFC. I am paying interest for an deposit. Should I deduct TDS

 

Absolutely dear, TDS provisions as per sec-194A will also be applicable on interest on deposits paid by NBFCs, provided the recipient is a resident & the amount exceeds Rs.5,000/- at the time of payment or credit, whichever is earlier, as they are also not covered in the exceptions as per sec-194A(3) & 197(1D). 

Hope ur doubt is cleared now..


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