Tds on interest payments

TDS / TCS 645 views 2 replies

jayesh shah

BUSINESS

99 Points Posted on 12 June 2012

My client is maintaning separate Books of Accounts i.e Business Set & personal sets. In business set which is proprietory concern having Turn over of Rs.1.00 crores dulyy audited u/s 44 AB of the Act. In personal set of Books of accounts , income is Dividend , Bank interest , Capital Gain of shares etc. In persoanl Set , they have also paid interest exceeding Rs.10000/- My question is TDs is required to be deducted u/s 194 A although, in personal set ther is no business income . Proprietory Business income only clubed in his individual Return

Jayesh shah CA

Replies (2)

Guest

Yes, in the eye of Income Tax PAN is the Identity, hence as per my opinion TDS is required to deduct in personal books of account also on Interest Payment exceeding 10,000/-

CA. Amit Prajapati

Chartered Accountant

118 Points Posted on 12 June 2012

Dear Jayesh TDS on interest is governed by section 194A one of the the condition for non application of this TDS is as below for Individual.

Provided that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such interest is credited or paid, shall be liable to deduct income-tax under this section.

So if the Business income has increased 1 Crore it will have to deducted TDS on personal accounts interest as well. If it happen to be only other income TDS deduction was not required.