Dear Vijaya Kumar

There is no need to deduct TDS on Interest charged on Loan borrowed from Bank which is working under the Banking Regulations Act, 1949. But TDS is to be deducted on interest paid on Unsecured Loan ie the Individual.

Regards,

Devendra P Kulkarni

TDS to be deducted on the payment of interest to the individual.

section 194A 

(3) The provisions of sub-section (1) shall not apply— 

(iii) 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

but applies to individual fromwhom u taken unsecured loan

Hi Vijay,

If your status is individual and your turnover is <40 lacs(60 lacs for Asst year 2011-12) then you need deduct tax. However, if your TO is > 40 lacs you have to deduct tax for interest payment made to individual.

If your status is other than individual and huf  you have to comply   tds provisions

regards

Yes,  a perfect answer from  Kanagaraj Sir.

TDS to be deducted on the payment of interest to the individual.

& in case of loan took from bank ( secured) No TDS will b attracted.

Section 194A does not apply on individual or HUF. i.e they are not required to deduct TDS.

Secondly, TDS is not required to be deducted where such income is credited or paid to-

- any banking company, co-operative society engaged  in the carrying on business of banking ,any finacial corporation, LIC, UTI or any Co. or co-operative society carrying on the business of insurance.

sir, when i deposit amount in post office in MIS scheme and post office give us monthly interest.....

MIS Rs: 5,00,000/-

Monthly : @ 8% P.A. So, interest 40,000/-

post office interest pay karta hai..... but without deducting tds....

plz reply with proper evidence , post office per tds applicable nahi hai kya ??

sanjay

are sir koi to answer de do is query ka................

Dear Vijaya Kumar There is no need to deduct TDS on Interest charged on Loan borrowed from Bank which is working under the Banking Regulations Act, 1949. But TDS is to be deducted on interest paid on Unsecured Loan ie the Individual.

@ lucky /sanjay

Sec 194A is not applicable to post office MIS,time deposit,recurring deposit,KVP,NSC.Go through the list of exemptions (more than 10) to sec 194A where tds is not to be deducted from a book which contains details.

Please refer the list of NOTIFIED Banks.

Thare are bankes regulated by BR Act 1949 But are not Notified for TDS Exception U/s 194A..

yes agree with Mr CA  kanagaraj