TDS on Interest on Loan from Director

Hi Prajesh

In my opinion two factors are involved:

1. Personal Loan Interest by Director to Bank: On which no TDS is to be deducted by an Individual
2. Same loan given by Director to Compnay: Compnay needs to first pay interest to Directors; Deduct TDS pay it to Govt. and then reimburse the TDS to Director to bring parity on his pocket.
3. To compensate for TDS What can be done here is to pay the director by way of some reimbursements of expenses

Kindly write if any of you differ here.

Thanks

Hi, Prajesh

Same quarry was solved by Honorable Supreme Court in which it was held that TDS would be deducted on loan paid by the director to the company even if same amount of interest is paid th bank by director.

Thanks,

Lovenish Bansal

Hello Hema,

Thanks for ur reply.

Hello, Bansal Sir,

Thanks for ur reply, can u send the jugdment copy of Supreme Court, if u have, that will be very helpful to me.

Regards

Prajesh Vyas

If a director takes loan in his personal name and give that laon to Company, then in this case if interest come under the TDS slab, ( more than 5000/-) then TDS is applicable or not...coz company pays the interest not directly to Bank, company pays interest to director (interest equals to charged by bank). and director pays the interest to Bank or company transfers the interest amount to his loan A/c.
If there any notification is avoilable please send

regards

K.Ganesan

Tax Consultant