Yes,there is a written agreement on the condition that the borrower will repay the loan at the end of 3 years at the then market value of land or the lender can take the land after 3 years. Then what is the tax provision in this respect? TDS on notional interest or capital gain? Shall the borrower start deducting TDS u/s 194A on notional interest right from the beginning of the agreement & adjust the TDS at the time of repayment of loan or can the TDS be adjusted with the long term capital gain while giving away the land after 3 years? What if the notional interest does not exceed Rs 15,000/- i.e. Rs 5000/- p.a.? Can a pvt Ltd company make such an agreement without being NBFC?
CA. Saurabh Mitra
CAclubindia
