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TDS Deduction on intt. on Loan Repayment

Gaurav Vashist (Article) (24 Points)

08 June 2010

I have to know whether TDS have been deducted on interest on loan repayment to Reliance Money(example) if the loan is taken against the any asset and it is secured .

Please guide in this regard.

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17 Replies

Prabeer (B. COM (H) CA & CS Final) (5484 Points)
Replied 08 June 2010

Pls elaborate ur query.

SIVASIVA (FCA, Future CA) (4935 Points)
Replied 08 June 2010

for interest on any loans paid to Financial Institutions INTEREST IS NOT LIABLE UNDER 194A

Read that particular section, point by point you will get it

SUNNY (STUDENT CS) (377 Points)
Replied 08 June 2010

u r giving interest so there is no question to deduct tds

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 08 June 2010

Exemption is provided to the following i. e. no TDS on interest paid to them:

to such income credited or paid to—

(a) any banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies, or any co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank), or

(b) any financial corporation established by or under a Central, State or Provincial Act, or

(d) the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), or

(e) any company or co-operative society carrying on the business of insurance, or

(f) such other institution, association or body ⁷⁸[or class of institutions, associations or bodies] which the Central Government may, for reasons to be recorded in writing, notify⁷⁹ in this behalf in the Official Gazette;

If Reliance money does not fall in above then TDS deductible.

1 Like

Akhil Gupta (Manager F&A) (856 Points)
Replied 08 June 2010

Reply of Aditya Maheshwari is self explanatory.

TRILOCHAN (SENIOR ACCOUNTANT) (698 Points)
Replied 08 June 2010

Dear All

I am 150% agree with aditya sir,

my employer also taken money from Reliance Capital Ltd. and India Bulls , We are paying Interest to them, On Interst we are deducting TDS and get the refund from them after depositing the TDS Certificates

Thnks

TRILOCHAN

1 Like

TRILOCHAN (SENIOR ACCOUNTANT) (698 Points)
Replied 08 June 2010

Dear Shiva Shiva

You should know the difference between NBFC and Financial Institutioin.

Reliance Capital Ltd is a NBFC Company not a financial Institution

You should deduct TDS on Interest paid to them.

NBFC is not exempt under section194A

Thanks

TRILOCHAN

Jagdish Bhalia (Practicing CA) (453 Points)
Replied 08 June 2010

Agreed with Mr. Aditya Maheshwari TDS will be deduted u/s 194A on payment made to Reliance money towards interest .

Niraj (CHARTERED ACCOUNTANTS) (72 Points)
Replied 09 June 2010

Dear Gaurav

TDS is deducted on the payment made to the Reliance, if loan repayment of any nationalised bank than the same is not applied but the reliance money is not bank it is a financial institution hence the same is applicable.

CA Bikash Biswal (Chartered Accountant) (85 Points)
Replied 09 June 2010

Dear gourav

Aditya sir is right.As TDS on interest is deducted when the payment is made to any NBFC & any financial instituion which is not a Banking organisation.

PRATEEK (ACA) (102 Points)
Replied 10 June 2010

THE COVERAGE OF INTEREST OF LOAN IS COVERED U/S 194A ( INTEREST ON INTEREST OTHER THEN SECURITIES) ,IF THE INTEREST AMOUNT EXCEEDS RS 5000 THEN TDS WOULD BE DEDUCTED PROVIDED THE PAYER IS A CORPORATE ASSESSE OF AN INDIVISUAL OR HUF COVERED UNDER TAX AUDIT U/S 44AB.