Tds on usecured loans

1) The Interest rate depends on the mutual agreement between the Borrower and the Lender.

2) TDS is to be deducted on the Interest payments @ 10% u/s 194A of the Income Tax Act, 1961, if the Interest exceeds Rs. 5000.

Regards,

Devendra Kulkarni

Interest rate on unsecured loans will be decided between the parties based on the market rate.

In case the interest is paid by a non-banking company, if the interest amount exceeds Rs. 5000, then TDS must be deducted @ 10% (either individuals or others) u/s 194A

and one more thing i would like to ask if some one give unsecured loan on the name of director then it will come in tds deduction or not ?

YES TDS WOULD BE DEDUCTED IF UNSECURED LOAN IS IN THE NAME OF DIRECTOR, 

O

Mr. Devendra's opinion is right.

If a third party provides loan on the name of a Director then the company can utilise the funds only as an unsecured loan received from the Director.

Hence if any interest paid by the director to the lender the company is not liable to any TDS.

But if the company pays any interst to the director then the provision u/s 194A is applicable.

Thanks & Regards

Ram. 

yes devendra is right