TDS on interest payable on loan given by individual to proprietorship company

This discussion clarifies the Tax Deducted at Source (TDS) implications when an individual provides a loan to a proprietorship company. TDS is generally deductible on interest exceeding Rs 5,000 during the financial year, regardless of whether the loan principal is repaid. However, the liability for TDS deduction by the individual rests on whether they are subject to tax audit under Section 44AB.