TDS on interest on unsecured loans

One of our client is PIO (person of Indian origin) holding his business in India. He has lend sizeable amount as unsecured loan to this business. Now they are contemplating to pay interest to the business owner in order to save potential tax liability of the business. My questions are

1. What % TDS would be applicable if such interest is paid ? If interest is paid even at 10 %, that will be close to 2 crores.

2. Is PIO required to file an income tax return similar to "normal resident" status individual ? Which means will he be subjected to similar slabs & rates ?

 

Replies (1)

No takers on this ?  I will elaborate this post  a little more. E.g. Assuming member gets interest of 1 crore ; TDS at 10 % is deducted while paying interest to the member for unsecured loan, which means 90 lakhs will be paid as interest net of TDS. Now the member needs to file his IT return in India, his taxable income exceeds slab of 8 lakhs. Assuming he does not have any other rebates/ exemptions, will his income be taxed at 30 % slab rate ?

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details
Company
12 October 2026
AUDIT , ACCOUNTS AND TAXATION

KDSS

New Delhi

B.Com

View Details
Company
08 October 2026
Account Executive

Elite Taxation

New Delhi

CA Foundation

View Details
Company
Featured 21 September 2026
Consultant - Reporting

Finrep Advisors LLP

Mumbai

CA

View Details
Company
30 September 2026
Senior Accounts Executive

Codeboard Technology

Chennai

MBA

View Details
Company
30 September 2026
Senior Accountant

Codeboard Technology

Chennai

B.Com

View Details
Company
ARTICLESHIP 01 October 2026
Articled Assistant

KPSN & Associates LLP

Chennai

CA Inter

View Details
Company
13 October 2026
Accountant

Zerdi & Co. Chartered Accountants

Pune

B.Com

View Details