Tds on interest paid to finance

A company is  paying EMI with interest for Car taken to Fiannce companies like Axis Bank, Bajaj Finance and other private banks. In this regards, weather company has to deduct TDS on interest?

Replies (1)

If interest is paid to a bank: TDS not applicable.
.
If interest is paid to a NBFC (like Bajaj Finance Ltd.): TDS applicable.


Sec. 194A(3)(iii): The provisions of sec. 194A shall not apply 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), or
.
(b) any financial corporation established by or under a Central, State or Provincial Act, or
.
(c) the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), or
.
(d) the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), or
.
(e) any company or co-operative society carrying on the business of insurance, or
.
(f) such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette;

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