Assistant Manager
388 Points
Joined January 2009
Yes it needs to be deducted, if you are not an individual or HUF, or if you are an individual, then you have the turnover specified in 44AB, and the limit is Rs. 5,000/- in this case. if the interest amount exceeds Rs. 5,000/-, then you are liable to deduct tax. Hope you are not a co-operative society and the creditor is also not a co-operative society. If both the parties are, then section shall not apply.
194A. 16(1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income 18[by way of interest on securities], shall, at the time of credit of such income to the account of the payee19 or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force :
20[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.]