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Tds liability on Interest on delayed payment of purchase bills !
Whether TDS is to be deducted on Interest Paid On Late Payment to Creditors or Delayed Purchase Payments, for suppose any amount exceeding threshold limit ?
Replies (2)
No TDS is liable to be deducted in case of interest accurued due to trading liability
ITO vs. Parag Mahasukhlal Shah, the Hon’ble tribunal (Ahmedabad Bench) held that a payment which has direct nexus with the trading liability being connected with the delayed purchase payments will not be regarded as Interest as defined in Section 2(28A).[2011 (46) SOT 302]
Similar view has been taken by the Hon’ble Tribunal (Hyderabad Bench) in case of Sri Venkatesh Paper Agencies (Hyd.) Pvt. Ltd. vs. DCIT. [ITA No. 636 of 2011].
So it can be concluded that such interest doesn’t fall under section 194A and therefore no TDS is deductible under such a case.
GOOD EXPLAIN BY SANGHVI,,,,,,,,,,,,,,,
IT IS VERY SIMPLE TO UNDERSTAND THAT TDS WILL BE DEDUCTE AGAINST INTEREST ONLY WHEN YOU PAID FOR LOAN AMT.,,,,,,,,,,,,,,,
AND LATE PAYMENT INEREST LIKE A DELAY PAYMENT CHARGE ,,,,,,,,,,,,,
SO YOU ARE NOT REQURE TO DEDUCTE TDS,,,,,,,,,,,,
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