Scenario - XYZ Ltd. is a private limited company. It has taken mobilisation advance from NPCC Ltd. for the contract awarded. Now NPCC Ltd has charged interest @ 12% p.a. on Mobilisation Advance as per the calculation pre defined in the agreement. The interest is deducted from the running bills alongwith other deductions directly by NPCC Ltd at the time of payment of running bills.
Now the query - Is XYZ Ltd. liable to deduct TDS on interest on mobilisation advance deducted by NPCC Ltd.? If not, please help with reference to any case laws or specific provisions of the Act.
Please reply in urgent. Case related to FY 22-23 which is under audit due on 30th Sep, 2023.
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